Correlation Between Touchstone Ultra and Franklin New
Can any of the company-specific risk be diversified away by investing in both Touchstone Ultra 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 Ultra 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 Ultra Short and Franklin New York, you can compare the effects of market volatilities on Touchstone Ultra 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 Ultra with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Ultra and Franklin New.
Diversification Opportunities for Touchstone Ultra and Franklin New
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Franklin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Ultra Short 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 Ultra 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 Ultra Short 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 Ultra i.e., Touchstone Ultra and Franklin New go up and down completely randomly.
Pair Corralation between Touchstone Ultra and Franklin New
Assuming the 90 days horizon Touchstone Ultra Short is expected to generate 0.35 times more return on investment than Franklin New. However, Touchstone Ultra Short is 2.89 times less risky than Franklin New. It trades about 0.24 of its potential returns per unit of risk. Franklin New York is currently generating about 0.07 per unit of risk. If you would invest 826.00 in Touchstone Ultra Short on August 30, 2024 and sell it today you would earn a total of 98.00 from holding Touchstone Ultra Short or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Ultra Short vs. Franklin New York
Performance |
| Timeline |
| Touchstone Ultra Short |
| Franklin New York |
Touchstone Ultra and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Ultra and Franklin New
The main advantage of trading using opposite Touchstone Ultra and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Ultra 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 Ultra vs. Short Term Fund R | Touchstone Ultra vs. Putnam Ultra Short | Touchstone Ultra vs. HUMANA INC | Touchstone Ultra vs. Aquagold International |
| Franklin New vs. Sterling Capital Short | Franklin New vs. Ab Select Longshort | Franklin New vs. Barings Active Short | Franklin New vs. Touchstone Ultra Short |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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