Correlation Between Mid Cap and Touchstone International
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Touchstone International 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 Mid Cap and Touchstone International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Touchstone International Small, you can compare the effects of market volatilities on Mid Cap and Touchstone International 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 Mid Cap with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Touchstone International.
Diversification Opportunities for Mid Cap and Touchstone International
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mid and Touchstone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Touchstone International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Mid Cap 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 Mid Cap Growth are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of Mid Cap i.e., Mid Cap and Touchstone International go up and down completely randomly.
Pair Corralation between Mid Cap and Touchstone International
Assuming the 90 days horizon Mid Cap Growth is expected to generate 1.23 times more return on investment than Touchstone International. However, Mid Cap is 1.23 times more volatile than Touchstone International Small. It trades about 0.09 of its potential returns per unit of risk. Touchstone International Small is currently generating about 0.09 per unit of risk. If you would invest 3,609 in Mid Cap Growth on September 12, 2024 and sell it today you would earn a total of 840.00 from holding Mid Cap Growth or generate 23.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.3% |
| Values | Daily Returns |
Mid Cap Growth vs. Touchstone International Small
Performance |
| Timeline |
| Mid Cap Growth |
| Touchstone International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mid Cap and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Touchstone International
The main advantage of trading using opposite Mid Cap and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Touchstone International 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 International will offset losses from the drop in Touchstone International's long position.| Mid Cap vs. Touchstone Mid Cap | Mid Cap vs. Federated Mdt Small | Mid Cap vs. Harding Loevner International | Mid Cap vs. Sterling Capital Equity |
| Touchstone International vs. John Hancock Money | Touchstone International vs. Schwab Treasury Money | Touchstone International vs. General Money Market | Touchstone International vs. Money Market Obligations |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |