Correlation Between Touchstone Mid and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Touchstone Mid and Federated Kaufmann 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 Mid and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Mid Cap and Federated Kaufmann Small, you can compare the effects of market volatilities on Touchstone Mid and Federated Kaufmann 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 Mid with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Mid and Federated Kaufmann.
Diversification Opportunities for Touchstone Mid and Federated Kaufmann
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Federated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Mid Cap and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small and Touchstone Mid 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 Mid Cap are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Touchstone Mid i.e., Touchstone Mid and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Touchstone Mid and Federated Kaufmann
Assuming the 90 days horizon Touchstone Mid is expected to generate 1.6 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Touchstone Mid Cap is 1.36 times less risky than Federated Kaufmann. It trades about 0.02 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,432 in Federated Kaufmann Small on October 25, 2024 and sell it today you would earn a total of 517.00 from holding Federated Kaufmann Small or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Mid Cap vs. Federated Kaufmann Small
Performance |
| Timeline |
| Touchstone Mid Cap |
| Federated Kaufmann Small |
Touchstone Mid and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Mid and Federated Kaufmann
The main advantage of trading using opposite Touchstone Mid and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Mid position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Touchstone Mid vs. Mid Cap Growth | Touchstone Mid vs. Federated Mdt Small | Touchstone Mid vs. Causeway International Value | Touchstone Mid vs. Virtus Kar Small Cap |
| Federated Kaufmann vs. Flakqx | Federated Kaufmann vs. Fzsvmx | Federated Kaufmann vs. Fznopx | Federated Kaufmann vs. Fwnhtx |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |