Correlation Between Touchstone International and Franklin New
Can any of the company-specific risk be diversified away by investing in both Touchstone International and Franklin New 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 International and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone International Equity and Franklin New York, you can compare the effects of market volatilities on Touchstone International and Franklin New 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 International with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Franklin New.
Diversification Opportunities for Touchstone International and Franklin New
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and Franklin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Touchstone International 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 International Equity are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Touchstone International i.e., Touchstone International and Franklin New go up and down completely randomly.
Pair Corralation between Touchstone International and Franklin New
Assuming the 90 days horizon Touchstone International Equity is expected to under-perform the Franklin New. In addition to that, Touchstone International is 3.7 times more volatile than Franklin New York. It trades about -0.23 of its total potential returns per unit of risk. Franklin New York is currently generating about 0.17 per unit of volatility. If you would invest 1,075 in Franklin New York on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Franklin New York or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Equit vs. Franklin New York
Performance |
| Timeline |
| Touchstone International |
| Franklin New York |
Touchstone International and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Franklin New
The main advantage of trading using opposite Touchstone International and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Touchstone International vs. Touchstone Small Cap | Touchstone International vs. Touchstone Sands Capital | Touchstone International vs. Mid Cap Growth | Touchstone International vs. Mid Cap Growth |
| Franklin New vs. Vanguard Short Term Government | Franklin New vs. Gamco Global Telecommunications | Franklin New vs. The National Tax Free | Franklin New vs. Dws Government Money |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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