Correlation Between Touchstone Large and California Bond
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Touchstone Large and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and California Bond.
Diversification Opportunities for Touchstone Large and California Bond
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Touchstone and California is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Touchstone Large i.e., Touchstone Large and California Bond go up and down completely randomly.
Pair Corralation between Touchstone Large and California Bond
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 2.23 times more return on investment than California Bond. However, Touchstone Large is 2.23 times more volatile than California Bond Fund. It trades about 0.11 of its potential returns per unit of risk. California Bond Fund is currently generating about -0.04 per unit of risk. If you would invest 1,951 in Touchstone Large Cap on October 23, 2024 and sell it today you would earn a total of 23.00 from holding Touchstone Large Cap or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. California Bond Fund
Performance |
| Timeline |
| Touchstone Large Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| California Bond |
Touchstone Large and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and California Bond
The main advantage of trading using opposite Touchstone Large and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Touchstone Large vs. Global Gold Fund | Touchstone Large vs. Great West Goldman Sachs | Touchstone Large vs. World Precious Minerals | Touchstone Large vs. First Eagle Gold |
| California Bond vs. The Texas Fund | California Bond vs. Small Cap Stock | California Bond vs. T Rowe Price | California Bond vs. Rbc Funds Trust |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |