Correlation Between Touchstone International and International Fund
Can any of the company-specific risk be diversified away by investing in both Touchstone International and International Fund 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 International Fund 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 International Fund International, you can compare the effects of market volatilities on Touchstone International and International Fund 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 International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and International Fund.
Diversification Opportunities for Touchstone International and International Fund
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TOUCHSTONE and International is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund 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 International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Touchstone International i.e., Touchstone International and International Fund go up and down completely randomly.
Pair Corralation between Touchstone International and International Fund
Assuming the 90 days horizon Touchstone International Equity is expected to generate 1.12 times more return on investment than International Fund. However, Touchstone International is 1.12 times more volatile than International Fund International. It trades about 0.37 of its potential returns per unit of risk. International Fund International is currently generating about 0.2 per unit of risk. If you would invest 1,421 in Touchstone International Equity on November 27, 2024 and sell it today you would earn a total of 84.00 from holding Touchstone International Equity or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Equit vs. International Fund Internation
Performance |
| Timeline |
| Touchstone International |
| International Fund |
Touchstone International and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and International Fund
The main advantage of trading using opposite Touchstone International and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, International Fund 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 International Fund will offset losses from the drop in International Fund's long position.| Touchstone International vs. Transamerica Short Term Bond | Touchstone International vs. Rbc Short Duration | Touchstone International vs. T Rowe Price | Touchstone International vs. Barings Active Short |
| International Fund vs. Hsbc Funds | International Fund vs. Dreyfus Institutional Reserves | International Fund vs. T Rowe Price | International Fund vs. Collegeadvantage 529 Savings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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