Correlation Between Americafirst Large and Touchstone Focused
Can any of the company-specific risk be diversified away by investing in both Americafirst Large 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 Americafirst Large and Touchstone Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Large Cap and Touchstone Focused Fund, you can compare the effects of market volatilities on Americafirst Large 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 Americafirst Large with a short position of Touchstone Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Touchstone Focused.
Diversification Opportunities for Americafirst Large and Touchstone Focused
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Americafirst and Touchstone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused and Americafirst Large 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 Americafirst Large Cap 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 Americafirst Large i.e., Americafirst Large and Touchstone Focused go up and down completely randomly.
Pair Corralation between Americafirst Large and Touchstone Focused
Assuming the 90 days horizon Americafirst Large Cap is expected to under-perform the Touchstone Focused. In addition to that, Americafirst Large is 1.46 times more volatile than Touchstone Focused Fund. It trades about -0.07 of its total potential returns per unit of risk. Touchstone Focused Fund is currently generating about 0.18 per unit of volatility. If you would invest 6,613 in Touchstone Focused Fund on November 5, 2024 and sell it today you would earn a total of 178.00 from holding Touchstone Focused Fund or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Touchstone Focused Fund
Performance |
| Timeline |
| Americafirst Large Cap |
| Touchstone Focused |
Americafirst Large and Touchstone Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Touchstone Focused
The main advantage of trading using opposite Americafirst Large and Touchstone Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large 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.| Americafirst Large vs. Franklin Emerging Market | Americafirst Large vs. Artisan Developing World | Americafirst Large vs. Doubleline Emerging Markets | Americafirst Large vs. Vy Jpmorgan Emerging |
| Touchstone Focused vs. Madison Diversified Income | Touchstone Focused vs. Jhancock Diversified Macro | Touchstone Focused vs. Jpmorgan Diversified Fund | Touchstone Focused vs. Global Diversified Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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