Correlation Between Touchstone Large and Dunham Floating
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Dunham Floating 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 Dunham Floating 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 Dunham Floating Rate, you can compare the effects of market volatilities on Touchstone Large and Dunham Floating 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 Dunham Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Dunham Floating.
Diversification Opportunities for Touchstone Large and Dunham Floating
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Dunham is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Dunham Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Floating Rate 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 Dunham Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Floating Rate has no effect on the direction of Touchstone Large i.e., Touchstone Large and Dunham Floating go up and down completely randomly.
Pair Corralation between Touchstone Large and Dunham Floating
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 6.12 times more return on investment than Dunham Floating. However, Touchstone Large is 6.12 times more volatile than Dunham Floating Rate. It trades about 0.08 of its potential returns per unit of risk. Dunham Floating Rate is currently generating about 0.31 per unit of risk. If you would invest 1,564 in Touchstone Large Cap on September 3, 2024 and sell it today you would earn a total of 503.00 from holding Touchstone Large Cap or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Dunham Floating Rate
Performance |
| Timeline |
| Touchstone Large Cap |
| Dunham Floating Rate |
Touchstone Large and Dunham Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Dunham Floating
The main advantage of trading using opposite Touchstone Large and Dunham Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Dunham Floating 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 Dunham Floating will offset losses from the drop in Dunham Floating's long position.| Touchstone Large vs. Small Cap Stock | Touchstone Large vs. Omni Small Cap Value | Touchstone Large vs. Volumetric Fund Volumetric | Touchstone Large vs. Issachar Fund Class |
| Dunham Floating vs. Rbc Microcap Value | Dunham Floating vs. Acm Dynamic Opportunity | Dunham Floating vs. Leggmason Partners Institutional | Dunham Floating vs. Sei Daily Income |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |