Correlation Between Touchstone Sands and State Street
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands and State Street 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 Sands and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and State Street Target, you can compare the effects of market volatilities on Touchstone Sands and State Street 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 Sands with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and State Street.
Diversification Opportunities for Touchstone Sands and State Street
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and State is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target and Touchstone Sands 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 Sands Capital are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and State Street go up and down completely randomly.
Pair Corralation between Touchstone Sands and State Street
Assuming the 90 days horizon Touchstone Sands Capital is expected to under-perform the State Street. In addition to that, Touchstone Sands is 1.62 times more volatile than State Street Target. It trades about -0.21 of its total potential returns per unit of risk. State Street Target is currently generating about 0.11 per unit of volatility. If you would invest 1,378 in State Street Target on August 29, 2024 and sell it today you would earn a total of 16.00 from holding State Street Target or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. State Street Target
Performance |
| Timeline |
| Touchstone Sands Capital |
| State Street Target |
Touchstone Sands and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and State Street
The main advantage of trading using opposite Touchstone Sands and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Touchstone Sands vs. Vanguard Emerging Markets | Touchstone Sands vs. Vanguard Emerging Markets | Touchstone Sands vs. HUMANA INC | Touchstone Sands vs. Aquagold International |
| State Street vs. Commodities Strategy Fund | State Street vs. Touchstone Sands Capital | State Street vs. Barings Emerging Markets | State Street vs. T Rowe Price |
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 CEOs Directory module to screen CEOs from public companies around the world.
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