Correlation Between Touchstone International and The Hartford
Can any of the company-specific risk be diversified away by investing in both Touchstone International and The Hartford 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 The Hartford 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 The Hartford Equity, you can compare the effects of market volatilities on Touchstone International and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and The Hartford.
Diversification Opportunities for Touchstone International and The Hartford
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and The is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Touchstone International i.e., Touchstone International and The Hartford go up and down completely randomly.
Pair Corralation between Touchstone International and The Hartford
Assuming the 90 days horizon Touchstone International Equity is expected to generate 0.94 times more return on investment than The Hartford. However, Touchstone International Equity is 1.06 times less risky than The Hartford. It trades about 0.05 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.01 per unit of risk. If you would invest 1,312 in Touchstone International Equity on August 24, 2024 and sell it today you would earn a total of 256.00 from holding Touchstone International Equity or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Touchstone International Equit vs. The Hartford Equity
Performance |
| Timeline |
| Touchstone International |
| Hartford Equity |
Touchstone International and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and The Hartford
The main advantage of trading using opposite Touchstone International and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Touchstone International vs. Longleaf Partners International | Touchstone International vs. HUMANA INC | Touchstone International vs. Aquagold International | Touchstone International vs. Barloworld Ltd ADR |
| The Hartford vs. Federated Mdt Large | The Hartford vs. Nationwide Ziegler Nyse | The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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