Correlation Between Touchstone Ultra and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Touchstone Ultra and Stone Harbor 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 Stone Harbor 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 Stone Harbor Strategic, you can compare the effects of market volatilities on Touchstone Ultra and Stone Harbor 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 Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Ultra and Stone Harbor.
Diversification Opportunities for Touchstone Ultra and Stone Harbor
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Stone is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Ultra Short and Stone Harbor Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Strategic 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 Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Strategic has no effect on the direction of Touchstone Ultra i.e., Touchstone Ultra and Stone Harbor go up and down completely randomly.
Pair Corralation between Touchstone Ultra and Stone Harbor
If you would invest 917.00 in Touchstone Ultra Short on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Touchstone Ultra Short or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.38% |
| Values | Daily Returns |
Touchstone Ultra Short vs. Stone Harbor Strategic
Performance |
| Timeline |
| Touchstone Ultra Short |
| Stone Harbor Strategic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Touchstone Ultra and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Ultra and Stone Harbor
The main advantage of trading using opposite Touchstone Ultra and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Ultra position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Touchstone Ultra vs. Cardinal Small Cap | Touchstone Ultra vs. Smallcap Growth Fund | Touchstone Ultra vs. Pace Smallmedium Value | Touchstone Ultra vs. Ab Small Cap |
| Stone Harbor vs. Boston Partners Longshort | Stone Harbor vs. Touchstone Ultra Short | Stone Harbor vs. Easterly Snow Longshort | Stone Harbor vs. Franklin Federal Limited Term |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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