Correlation Between Touchstone Large and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Baron Emerging 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 Baron Emerging 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 Baron Emerging Markets, you can compare the effects of market volatilities on Touchstone Large and Baron Emerging 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 Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Baron Emerging.
Diversification Opportunities for Touchstone Large and Baron Emerging
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Baron is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets 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 Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Touchstone Large i.e., Touchstone Large and Baron Emerging go up and down completely randomly.
Pair Corralation between Touchstone Large and Baron Emerging
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.69 times more return on investment than Baron Emerging. However, Touchstone Large Cap is 1.45 times less risky than Baron Emerging. It trades about 0.18 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 1,916 in Touchstone Large Cap on August 28, 2024 and sell it today you would earn a total of 147.00 from holding Touchstone Large Cap or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Baron Emerging Markets
Performance |
| Timeline |
| Touchstone Large Cap |
| Baron Emerging Markets |
Touchstone Large and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Baron Emerging
The main advantage of trading using opposite Touchstone Large and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Baron Emerging 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 Baron Emerging will offset losses from the drop in Baron Emerging's long position.| Touchstone Large vs. Us Government Securities | Touchstone Large vs. Lord Abbett Government | Touchstone Large vs. Inverse Government Long | Touchstone Large vs. Us Government Plus |
| Baron Emerging vs. Fisher Large Cap | Baron Emerging vs. Touchstone Large Cap | Baron Emerging vs. Quantitative U S | Baron Emerging vs. Goldman Sachs Large |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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