Correlation Between Touchstone Large and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Templeton Growth 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 Large and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Templeton Growth Fund, you can compare the effects of market volatilities on Touchstone Large and Templeton Growth 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 Large with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Templeton Growth.
Diversification Opportunities for Touchstone Large and Templeton Growth
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Templeton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Touchstone 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 Touchstone Large Cap are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Touchstone Large i.e., Touchstone Large and Templeton Growth go up and down completely randomly.
Pair Corralation between Touchstone Large and Templeton Growth
Assuming the 90 days horizon Touchstone Large is expected to generate 1.29 times less return on investment than Templeton Growth. But when comparing it to its historical volatility, Touchstone Large Cap is 1.09 times less risky than Templeton Growth. It trades about 0.17 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,606 in Templeton Growth Fund on October 23, 2024 and sell it today you would earn a total of 69.00 from holding Templeton Growth Fund or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Templeton Growth Fund
Performance |
| Timeline |
| Touchstone Large Cap |
| Templeton Growth |
Touchstone Large and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Templeton Growth
The main advantage of trading using opposite Touchstone Large and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Touchstone Large vs. Guggenheim High Yield | Touchstone Large vs. Multi Manager High Yield | Touchstone Large vs. Msift High Yield | Touchstone Large vs. Gmo High Yield |
| Templeton Growth vs. Schwab Government Money | Templeton Growth vs. Voya Government Money | Templeton Growth vs. Transamerica Funds | Templeton Growth vs. Aig Government Money |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |