Correlation Between Touchstone Small and Chase Growth
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Chase Growth 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 Chase Growth 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 Chase Growth Fund, you can compare the effects of market volatilities on Touchstone Small and Chase Growth 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 Chase Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Chase Growth.
Diversification Opportunities for Touchstone Small and Chase Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Chase is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Chase Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chase Growth 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 Chase Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chase Growth has no effect on the direction of Touchstone Small i.e., Touchstone Small and Chase Growth go up and down completely randomly.
Pair Corralation between Touchstone Small and Chase Growth
Assuming the 90 days horizon Touchstone Small is expected to generate 1.24 times less return on investment than Chase Growth. In addition to that, Touchstone Small is 1.12 times more volatile than Chase Growth Fund. It trades about 0.09 of its total potential returns per unit of risk. Chase Growth Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,418 in Chase Growth Fund on September 1, 2024 and sell it today you would earn a total of 344.00 from holding Chase Growth Fund or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Chase Growth Fund
Performance |
| Timeline |
| Touchstone Small Cap |
| Chase Growth |
Touchstone Small and Chase Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Chase Growth
The main advantage of trading using opposite Touchstone Small and Chase Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Chase Growth 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 Chase Growth will offset losses from the drop in Chase Growth's long position.| Touchstone Small vs. Cutler Equity | Touchstone Small vs. Scharf Fund Retail | Touchstone Small vs. Huber Capital Equity | Touchstone Small vs. Icon Equity Income |
| Chase Growth vs. The Chesapeake Growth | Chase Growth vs. Aston Montag Caldwell | Chase Growth vs. The Jensen Portfolio | Chase Growth vs. Cambiar Opportunity Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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