Correlation Between Touchstone Large and International Equity
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and International Equity 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 International Equity 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 International Equity Fund, you can compare the effects of market volatilities on Touchstone Large and International Equity 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 International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and International Equity.
Diversification Opportunities for Touchstone Large and International Equity
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and International is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and International Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Touchstone Large i.e., Touchstone Large and International Equity go up and down completely randomly.
Pair Corralation between Touchstone Large and International Equity
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.88 times more return on investment than International Equity. However, Touchstone Large Cap is 1.14 times less risky than International Equity. It trades about 0.4 of its potential returns per unit of risk. International Equity Fund is currently generating about -0.07 per unit of risk. If you would invest 2,002 in Touchstone Large Cap on September 3, 2024 and sell it today you would earn a total of 125.00 from holding Touchstone Large Cap or generate 6.24% 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. International Equity Fund
Performance |
| Timeline |
| Touchstone Large Cap |
| International Equity |
Touchstone Large and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and International Equity
The main advantage of trading using opposite Touchstone Large and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.| Touchstone Large vs. Us Government Securities | Touchstone Large vs. Short Term Government Fund | Touchstone Large vs. Franklin Adjustable Government | Touchstone Large vs. Virtus Seix Government |
| International Equity vs. Touchstone Premium Yield | International Equity vs. Transamerica Funds | International Equity vs. Artisan High Income | International Equity vs. Bbh Intermediate Municipal |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |