Correlation Between Touchstone Large and Aam Select
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Aam Select 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 Aam Select 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 Aam Select Income, you can compare the effects of market volatilities on Touchstone Large and Aam Select 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 Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Aam Select.
Diversification Opportunities for Touchstone Large and Aam Select
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Touchstone and Aam is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income 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 Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Touchstone Large i.e., Touchstone Large and Aam Select go up and down completely randomly.
Pair Corralation between Touchstone Large and Aam Select
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 1.82 times more return on investment than Aam Select. However, Touchstone Large is 1.82 times more volatile than Aam Select Income. It trades about 0.09 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.06 per unit of risk. If you would invest 1,572 in Touchstone Large Cap on September 2, 2024 and sell it today you would earn a total of 555.00 from holding Touchstone Large Cap or generate 35.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Aam Select Income
Performance |
| Timeline |
| Touchstone Large Cap |
| Aam Select Income |
Touchstone Large and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Aam Select
The main advantage of trading using opposite Touchstone Large and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.| Touchstone Large vs. Absolute Convertible Arbitrage | Touchstone Large vs. Advent Claymore Convertible | Touchstone Large vs. Gabelli Convertible And | Touchstone Large vs. Columbia Vertible Securities |
| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income | Aam Select vs. Aam Select Income |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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