Correlation Between Cref Money and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Cref Money and Touchstone Small 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 Cref Money and Touchstone Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Touchstone Small Cap, you can compare the effects of market volatilities on Cref Money and Touchstone Small 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 Cref Money with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Touchstone Small.
Diversification Opportunities for Cref Money and Touchstone Small
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cref and Touchstone is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Small Cap and Cref Money 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 Cref Money Market are associated (or correlated) with Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of Cref Money i.e., Cref Money and Touchstone Small go up and down completely randomly.
Pair Corralation between Cref Money and Touchstone Small
Assuming the 90 days trading horizon Cref Money is expected to generate 15.59 times less return on investment than Touchstone Small. But when comparing it to its historical volatility, Cref Money Market is 54.8 times less risky than Touchstone Small. It trades about 1.02 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,819 in Touchstone Small Cap on October 23, 2024 and sell it today you would earn a total of 190.00 from holding Touchstone Small Cap or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cref Money Market vs. Touchstone Small Cap
Performance |
| Timeline |
| Cref Money Market |
| Touchstone Small Cap |
Cref Money and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Touchstone Small
The main advantage of trading using opposite Cref Money and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Touchstone Small 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 Small will offset losses from the drop in Touchstone Small's long position.| Cref Money vs. Dreyfus Technology Growth | Cref Money vs. Technology Ultrasector Profund | Cref Money vs. Goldman Sachs Technology | Cref Money vs. Hennessy Technology Fund |
| Touchstone Small vs. Touchstone Sands Capital | Touchstone Small vs. Mid Cap Growth | Touchstone Small vs. Mid Cap Growth | Touchstone Small 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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