Correlation Between Touchstone Dividend and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Touchstone Dividend and Growth Strategy 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 Dividend and Growth Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Dividend Equity and Growth Strategy Fund, you can compare the effects of market volatilities on Touchstone Dividend and Growth Strategy 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 Dividend with a short position of Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Dividend and Growth Strategy.
Diversification Opportunities for Touchstone Dividend and Growth Strategy
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Growth is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Dividend Equity and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy and Touchstone Dividend 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 Dividend Equity are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Touchstone Dividend i.e., Touchstone Dividend and Growth Strategy go up and down completely randomly.
Pair Corralation between Touchstone Dividend and Growth Strategy
Assuming the 90 days horizon Touchstone Dividend Equity is expected to generate 1.14 times more return on investment than Growth Strategy. However, Touchstone Dividend is 1.14 times more volatile than Growth Strategy Fund. It trades about 0.14 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.11 per unit of risk. If you would invest 1,823 in Touchstone Dividend Equity on October 25, 2024 and sell it today you would earn a total of 34.00 from holding Touchstone Dividend Equity or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Dividend Equity vs. Growth Strategy Fund
Performance |
| Timeline |
| Touchstone Dividend |
| Growth Strategy |
Touchstone Dividend and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Dividend and Growth Strategy
The main advantage of trading using opposite Touchstone Dividend and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Dividend position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Touchstone Dividend vs. Growth Strategy Fund | Touchstone Dividend vs. Martin Currie Emerging | Touchstone Dividend vs. Morgan Stanley Emerging | Touchstone Dividend vs. Commodities Strategy Fund |
| Growth Strategy vs. Western Asset Adjustable | Growth Strategy vs. T Rowe Price | Growth Strategy vs. Growth Fund Of | Growth Strategy vs. Rational Dividend Capture |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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