Correlation Between Growth Opportunities and Touchstone Mid
Can any of the company-specific risk be diversified away by investing in both Growth Opportunities and Touchstone Mid 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 Growth Opportunities and Touchstone Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Opportunities Fund and Touchstone Mid Cap, you can compare the effects of market volatilities on Growth Opportunities and Touchstone Mid 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 Growth Opportunities with a short position of Touchstone Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Opportunities and Touchstone Mid.
Diversification Opportunities for Growth Opportunities and Touchstone Mid
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Touchstone is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Growth Opportunities Fund and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap and Growth Opportunities 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 Growth Opportunities Fund are associated (or correlated) with Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of Growth Opportunities i.e., Growth Opportunities and Touchstone Mid go up and down completely randomly.
Pair Corralation between Growth Opportunities and Touchstone Mid
Assuming the 90 days horizon Growth Opportunities Fund is expected to generate 1.07 times more return on investment than Touchstone Mid. However, Growth Opportunities is 1.07 times more volatile than Touchstone Mid Cap. It trades about 0.12 of its potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.08 per unit of risk. If you would invest 3,248 in Growth Opportunities Fund on September 3, 2024 and sell it today you would earn a total of 2,460 from holding Growth Opportunities Fund or generate 75.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Opportunities Fund vs. Touchstone Mid Cap
Performance |
| Timeline |
| Growth Opportunities |
| Touchstone Mid Cap |
Growth Opportunities and Touchstone Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Opportunities and Touchstone Mid
The main advantage of trading using opposite Growth Opportunities and Touchstone Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Opportunities position performs unexpectedly, Touchstone Mid 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 Touchstone Mid will offset losses from the drop in Touchstone Mid's long position.| Growth Opportunities vs. Allianzgi Convertible Income | Growth Opportunities vs. Virtus Convertible | Growth Opportunities vs. Rationalpier 88 Convertible | Growth Opportunities vs. Fidelity Sai Convertible |
| Touchstone Mid vs. Legg Mason Partners | Touchstone Mid vs. Jp Morgan Smartretirement | Touchstone Mid vs. T Rowe Price | Touchstone Mid vs. Qs Moderate Growth |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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