Correlation Between Touchstone Small and Dunham High
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Dunham High 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 Dunham High 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 Dunham High Yield, you can compare the effects of market volatilities on Touchstone Small and Dunham High 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 Dunham High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Dunham High.
Diversification Opportunities for Touchstone Small and Dunham High
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Touchstone and Dunham is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Dunham High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham High Yield 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 Dunham High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham High Yield has no effect on the direction of Touchstone Small i.e., Touchstone Small and Dunham High go up and down completely randomly.
Pair Corralation between Touchstone Small and Dunham High
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 6.52 times more return on investment than Dunham High. However, Touchstone Small is 6.52 times more volatile than Dunham High Yield. It trades about 0.04 of its potential returns per unit of risk. Dunham High Yield is currently generating about 0.19 per unit of risk. If you would invest 3,751 in Touchstone Small Cap on October 26, 2024 and sell it today you would earn a total of 216.00 from holding Touchstone Small Cap or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Dunham High Yield
Performance |
| Timeline |
| Touchstone Small Cap |
| Dunham High Yield |
Touchstone Small and Dunham High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Dunham High
The main advantage of trading using opposite Touchstone Small and Dunham High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Dunham High 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 Dunham High will offset losses from the drop in Dunham High's long position.| Touchstone Small vs. Artisan High Income | Touchstone Small vs. Victory High Yield | Touchstone Small vs. Voya High Yield | Touchstone Small vs. City National Rochdale |
| Dunham High vs. Touchstone Small Cap | Dunham High vs. Goldman Sachs Smallmid | Dunham High vs. Nuveen Small Cap | Dunham High vs. Df Dent 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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