Correlation Between Touchstone Ohio and American Beacon
Can any of the company-specific risk be diversified away by investing in both Touchstone Ohio and American Beacon 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 Ohio and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Ohio Tax and American Beacon Garcia, you can compare the effects of market volatilities on Touchstone Ohio and American Beacon 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 Ohio with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Ohio and American Beacon.
Diversification Opportunities for Touchstone Ohio and American Beacon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and American is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Ohio Tax and American Beacon Garcia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Garcia and Touchstone Ohio 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 Ohio Tax are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Garcia has no effect on the direction of Touchstone Ohio i.e., Touchstone Ohio and American Beacon go up and down completely randomly.
Pair Corralation between Touchstone Ohio and American Beacon
Assuming the 90 days horizon Touchstone Ohio Tax is expected to generate 0.41 times more return on investment than American Beacon. However, Touchstone Ohio Tax is 2.42 times less risky than American Beacon. It trades about 0.05 of its potential returns per unit of risk. American Beacon Garcia is currently generating about 0.02 per unit of risk. If you would invest 1,030 in Touchstone Ohio Tax on November 28, 2024 and sell it today you would earn a total of 54.00 from holding Touchstone Ohio Tax or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Ohio Tax vs. American Beacon Garcia
Performance |
| Timeline |
| Touchstone Ohio Tax |
| American Beacon Garcia |
Touchstone Ohio and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Ohio and American Beacon
The main advantage of trading using opposite Touchstone Ohio and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Ohio position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Touchstone Ohio vs. Mid Cap Growth | Touchstone Ohio vs. Mid Cap Growth | Touchstone Ohio vs. Mid Cap Growth | Touchstone Ohio vs. Sentinel Small Pany |
| American Beacon vs. Amer Beacon Ark | American Beacon vs. Amer Beacon Ark | American Beacon vs. American Beacon Large | American Beacon vs. American Beacon Ark |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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