Correlation Between Touchstone Large and Lkcm International
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Lkcm 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 Lkcm 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 Lkcm International Equity, you can compare the effects of market volatilities on Touchstone Large and Lkcm 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 Lkcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Lkcm International.
Diversification Opportunities for Touchstone Large and Lkcm International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and Lkcm is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Lkcm International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm International 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 Lkcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm International Equity has no effect on the direction of Touchstone Large i.e., Touchstone Large and Lkcm International go up and down completely randomly.
Pair Corralation between Touchstone Large and Lkcm International
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.8 times more return on investment than Lkcm International. However, Touchstone Large Cap is 1.25 times less risky than Lkcm International. It trades about 0.08 of its potential returns per unit of risk. Lkcm International Equity is currently generating about 0.03 per unit of risk. If you would invest 1,704 in Touchstone Large Cap on September 12, 2024 and sell it today you would earn a total of 317.00 from holding Touchstone Large Cap or generate 18.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Lkcm International Equity
Performance |
| Timeline |
| Touchstone Large Cap |
| Lkcm International Equity |
Touchstone Large and Lkcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Lkcm International
The main advantage of trading using opposite Touchstone Large and Lkcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Lkcm 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 Lkcm International will offset losses from the drop in Lkcm International's long position.| Touchstone Large vs. Jhancock Disciplined Value | Touchstone Large vs. Fidelity Series 1000 | Touchstone Large vs. Dana Large Cap | Touchstone Large vs. Americafirst Large Cap |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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