Correlation Between Touchstone Small and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Barings Emerging 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 Small and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Barings Emerging Markets, you can compare the effects of market volatilities on Touchstone Small and Barings Emerging 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 Small with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Barings Emerging.
Diversification Opportunities for Touchstone Small and Barings Emerging
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Barings is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Touchstone Small 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 Small Cap are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Touchstone Small i.e., Touchstone Small and Barings Emerging go up and down completely randomly.
Pair Corralation between Touchstone Small and Barings Emerging
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 4.74 times more return on investment than Barings Emerging. However, Touchstone Small is 4.74 times more volatile than Barings Emerging Markets. It trades about 0.28 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 3,824 in Touchstone Small Cap on September 4, 2024 and sell it today you would earn a total of 349.00 from holding Touchstone Small Cap or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Barings Emerging Markets
Performance |
| Timeline |
| Touchstone Small Cap |
| Barings Emerging Markets |
Touchstone Small and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Barings Emerging
The main advantage of trading using opposite Touchstone Small and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Touchstone Small vs. Issachar Fund Class | Touchstone Small vs. Semiconductor Ultrasector Profund | Touchstone Small vs. Volumetric Fund Volumetric | Touchstone Small vs. Nationwide Global Equity |
| Barings Emerging vs. Us Small Cap | Barings Emerging vs. Touchstone Small Cap | Barings Emerging vs. Massmutual Select Small | Barings Emerging vs. The Hartford Small |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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