Correlation Between Simt High and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Simt High 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 Simt High and Touchstone Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Touchstone Small Cap, you can compare the effects of market volatilities on Simt High 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 Simt High with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Touchstone Small.
Diversification Opportunities for Simt High and Touchstone Small
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simt and Touchstone is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield 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 Simt High 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 Simt High Yield 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 Simt High i.e., Simt High and Touchstone Small go up and down completely randomly.
Pair Corralation between Simt High and Touchstone Small
Assuming the 90 days horizon Simt High Yield is expected to generate 0.18 times more return on investment than Touchstone Small. However, Simt High Yield is 5.52 times less risky than Touchstone Small. It trades about 0.07 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about -0.09 per unit of risk. If you would invest 542.00 in Simt High Yield on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Simt High Yield or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Simt High Yield vs. Touchstone Small Cap
Performance |
| Timeline |
| Simt High Yield |
| Touchstone Small Cap |
Simt High and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Touchstone Small
The main advantage of trading using opposite Simt High and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High 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.| Simt High vs. SCOR PK | Simt High vs. Morningstar Unconstrained Allocation | Simt High vs. Via Renewables | Simt High vs. Bondbloxx ETF Trust |
| Touchstone Small vs. Smallcap Growth Fund | Touchstone Small vs. Mutual Of America | Touchstone Small vs. Aqr Small Cap | Touchstone Small vs. Scout Small Cap |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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