Correlation Between Touchstone Large and Aqr International
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Aqr 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 Touchstone Large and Aqr International 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 Aqr International Defensive, you can compare the effects of market volatilities on Touchstone Large and Aqr 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 Touchstone Large with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Aqr International.
Diversification Opportunities for Touchstone Large and Aqr International
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Touchstone and Aqr is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Touchstone Large i.e., Touchstone Large and Aqr International go up and down completely randomly.
Pair Corralation between Touchstone Large and Aqr International
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.9 times more return on investment than Aqr International. However, Touchstone Large Cap is 1.11 times less risky than Aqr International. It trades about 0.15 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.07 per unit of risk. If you would invest 1,604 in Touchstone Large Cap on September 1, 2024 and sell it today you would earn a total of 463.00 from holding Touchstone Large Cap or generate 28.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Aqr International Defensive
Performance |
| Timeline |
| Touchstone Large Cap |
| Aqr International |
Touchstone Large and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Aqr International
The main advantage of trading using opposite Touchstone Large and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Aqr 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 Aqr International will offset losses from the drop in Aqr International's long position.| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
| Aqr International vs. Origin Emerging Markets | Aqr International vs. Rbc Emerging Markets | Aqr International vs. Harbor Diversified International | Aqr International vs. Ab All Market |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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