Correlation Between NYSE Composite and Touchstone Focused
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Touchstone Focused at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Touchstone Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Touchstone Focused Fund, you can compare the effects of market volatilities on NYSE Composite and Touchstone Focused and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Touchstone Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Touchstone Focused.
Diversification Opportunities for NYSE Composite and Touchstone Focused
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Touchstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Touchstone Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Focused has no effect on the direction of NYSE Composite i.e., NYSE Composite and Touchstone Focused go up and down completely randomly.
Pair Corralation between NYSE Composite and Touchstone Focused
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.86 times more return on investment than Touchstone Focused. However, NYSE Composite is 1.17 times less risky than Touchstone Focused. It trades about 0.24 of its potential returns per unit of risk. Touchstone Focused Fund is currently generating about 0.15 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Touchstone Focused Fund
Performance |
| Timeline |
NYSE Composite and Touchstone Focused Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Touchstone Focused Fund
Pair trading matchups for Touchstone Focused
Pair Trading with NYSE Composite and Touchstone Focused
The main advantage of trading using opposite NYSE Composite and Touchstone Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Touchstone Focused can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Touchstone Focused will offset losses from the drop in Touchstone Focused's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Touchstone Focused vs. Touchstone Small Cap | Touchstone Focused vs. Touchstone Sands Capital | Touchstone Focused vs. Mid Cap Growth | Touchstone Focused vs. Mid Cap Growth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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