Correlation Between Touchstone Large and Frost Growth
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Frost Growth 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 Frost Growth 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 Frost Growth Equity, you can compare the effects of market volatilities on Touchstone Large and Frost Growth 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 Frost Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Frost Growth.
Diversification Opportunities for Touchstone Large and Frost Growth
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Touchstone and Frost is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Frost Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Growth Equity 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 Frost Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Growth Equity has no effect on the direction of Touchstone Large i.e., Touchstone Large and Frost Growth go up and down completely randomly.
Pair Corralation between Touchstone Large and Frost Growth
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.59 times more return on investment than Frost Growth. However, Touchstone Large Cap is 1.68 times less risky than Frost Growth. It trades about 0.19 of its potential returns per unit of risk. Frost Growth Equity is currently generating about -0.01 per unit of risk. If you would invest 1,898 in Touchstone Large Cap on November 30, 2024 and sell it today you would earn a total of 103.00 from holding Touchstone Large Cap or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Frost Growth Equity
Performance |
| Timeline |
| Touchstone Large Cap |
| Frost Growth Equity |
Touchstone Large and Frost Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Frost Growth
The main advantage of trading using opposite Touchstone Large and Frost Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Frost Growth 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 Frost Growth will offset losses from the drop in Frost Growth's long position.| Touchstone Large vs. Ashmore Emerging Markets | Touchstone Large vs. Doubleline Emerging Markets | Touchstone Large vs. Angel Oak Multi Strategy | Touchstone Large vs. Rbc Emerging Markets |
| Frost Growth vs. Jpmorgan Large Cap | Frost Growth vs. Fidelity Large Cap | Frost Growth vs. Ab Large Cap | Frost Growth vs. Calvert Large Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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