Correlation Between Touchstone Ultra and Inverse Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Touchstone Ultra and Inverse Nasdaq-100 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 Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Touchstone Ultra and Inverse Nasdaq-100 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 Inverse Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Ultra and Inverse Nasdaq-100.
Diversification Opportunities for Touchstone Ultra and Inverse Nasdaq-100
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and INVERSE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Ultra Short and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Touchstone Ultra i.e., Touchstone Ultra and Inverse Nasdaq-100 go up and down completely randomly.
Pair Corralation between Touchstone Ultra and Inverse Nasdaq-100
Assuming the 90 days horizon Touchstone Ultra Short is expected to generate 0.08 times more return on investment than Inverse Nasdaq-100. However, Touchstone Ultra Short is 12.39 times less risky than Inverse Nasdaq-100. It trades about 0.26 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.06 per unit of risk. If you would invest 866.00 in Touchstone Ultra Short on August 24, 2024 and sell it today you would earn a total of 58.00 from holding Touchstone Ultra Short or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Ultra Short vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Touchstone Ultra Short |
| Inverse Nasdaq 100 |
Touchstone Ultra and Inverse Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Ultra and Inverse Nasdaq-100
The main advantage of trading using opposite Touchstone Ultra and Inverse Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Ultra position performs unexpectedly, Inverse Nasdaq-100 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 Inverse Nasdaq-100 will offset losses from the drop in Inverse Nasdaq-100's long position.| Touchstone Ultra vs. HUMANA INC | Touchstone Ultra vs. Aquagold International | Touchstone Ultra vs. Barloworld Ltd ADR | Touchstone Ultra vs. Morningstar Unconstrained Allocation |
| Inverse Nasdaq-100 vs. Barings Active Short | Inverse Nasdaq-100 vs. Nuveen Short Term | Inverse Nasdaq-100 vs. Touchstone Ultra Short | Inverse Nasdaq-100 vs. Ultra Short Fixed Income |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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