Correlation Between Touchstone International and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Touchstone International and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Touchstone International and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Catalystmillburn.
Diversification Opportunities for Touchstone International and Catalystmillburn
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and Catalystmillburn is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Touchstone International i.e., Touchstone International and Catalystmillburn go up and down completely randomly.
Pair Corralation between Touchstone International and Catalystmillburn
Assuming the 90 days horizon Touchstone International Equity is expected to generate 1.07 times more return on investment than Catalystmillburn. However, Touchstone International is 1.07 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.05 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of risk. If you would invest 1,314 in Touchstone International Equity on September 13, 2024 and sell it today you would earn a total of 274.00 from holding Touchstone International Equity or generate 20.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Equit vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Touchstone International |
| Catalystmillburn Hedge |
Touchstone International and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Catalystmillburn
The main advantage of trading using opposite Touchstone International and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Touchstone International vs. Guidemark Smallmid Cap | Touchstone International vs. Glg Intl Small | Touchstone International vs. Cardinal Small Cap | Touchstone International vs. Small Pany Growth |
| Catalystmillburn vs. Multimedia Portfolio Multimedia | Catalystmillburn vs. Ms Global Fixed | Catalystmillburn vs. Qs Global Equity | Catalystmillburn vs. Touchstone International Equity |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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