Correlation Between Touchstone Large and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Touchstone Large and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Growth Strategy.
Diversification Opportunities for Touchstone Large and Growth Strategy
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and GROWTH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Touchstone Large i.e., Touchstone Large and Growth Strategy go up and down completely randomly.
Pair Corralation between Touchstone Large and Growth Strategy
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 1.5 times more return on investment than Growth Strategy. However, Touchstone Large is 1.5 times more volatile than Growth Strategy Fund. It trades about 0.4 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.33 per unit of risk. If you would invest 1,947 in Touchstone Large Cap on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Touchstone Large Cap or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Growth Strategy Fund
Performance |
| Timeline |
| Touchstone Large Cap |
| Growth Strategy |
Touchstone Large and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Growth Strategy
The main advantage of trading using opposite Touchstone Large and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy'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 |
| Growth Strategy vs. American Funds The | Growth Strategy vs. American Funds The | Growth Strategy vs. Income Fund Of | Growth Strategy vs. Income Fund Of |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |