Correlation Between Touchstone Sands and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands and Pear Tree 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 Touchstone Sands and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and Pear Tree Polaris, you can compare the effects of market volatilities on Touchstone Sands and Pear Tree 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 Touchstone Sands with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and Pear Tree.
Diversification Opportunities for Touchstone Sands and Pear Tree
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and Pear is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris and Touchstone Sands 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 Touchstone Sands Capital are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Pear Tree go up and down completely randomly.
Pair Corralation between Touchstone Sands and Pear Tree
Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 1.72 times more return on investment than Pear Tree. However, Touchstone Sands is 1.72 times more volatile than Pear Tree Polaris. It trades about 0.28 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.16 per unit of risk. If you would invest 1,504 in Touchstone Sands Capital on August 29, 2024 and sell it today you would earn a total of 128.00 from holding Touchstone Sands Capital or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. Pear Tree Polaris
Performance |
| Timeline |
| Touchstone Sands Capital |
| Pear Tree Polaris |
Touchstone Sands and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and Pear Tree
The main advantage of trading using opposite Touchstone Sands and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Touchstone Sands vs. Large Cap Fund | Touchstone Sands vs. Nicholas Ii Inc | Touchstone Sands vs. Mid Cap Value | Touchstone Sands vs. Tcw Relative Value |
| Pear Tree vs. HUMANA INC | Pear Tree vs. Aquagold International | Pear Tree vs. Barloworld Ltd ADR | Pear Tree vs. Morningstar Unconstrained Allocation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |