Correlation Between Touchstone Large and Blue Chip
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Blue Chip 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 Blue Chip 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 Blue Chip Fund, you can compare the effects of market volatilities on Touchstone Large and Blue Chip 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 Blue Chip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Blue Chip.
Diversification Opportunities for Touchstone Large and Blue Chip
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Blue is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Blue Chip Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Fund 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 Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Fund has no effect on the direction of Touchstone Large i.e., Touchstone Large and Blue Chip go up and down completely randomly.
Pair Corralation between Touchstone Large and Blue Chip
Assuming the 90 days horizon Touchstone Large Cap is expected to under-perform the Blue Chip. In addition to that, Touchstone Large is 1.13 times more volatile than Blue Chip Fund. It trades about -0.2 of its total potential returns per unit of risk. Blue Chip Fund is currently generating about 0.1 per unit of volatility. If you would invest 4,692 in Blue Chip Fund on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Blue Chip Fund or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Blue Chip Fund
Performance |
| Timeline |
| Touchstone Large Cap |
| Blue Chip Fund |
Touchstone Large and Blue Chip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Blue Chip
The main advantage of trading using opposite Touchstone Large and Blue Chip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Blue Chip 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 Blue Chip will offset losses from the drop in Blue Chip's long position.| Touchstone Large vs. Virtus Convertible | Touchstone Large vs. Gabelli Convertible And | Touchstone Large vs. Calamos Dynamic Convertible | Touchstone Large vs. Putnam Convertible Incm Gwth |
| Blue Chip vs. Morningstar Defensive Bond | Blue Chip vs. Doubleline Yield Opportunities | Blue Chip vs. Ambrus Core Bond | Blue Chip vs. Touchstone Premium Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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