Correlation Between Touchstone Small and Ab Global
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Ab Global 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 Ab Global 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 Ab Global E, you can compare the effects of market volatilities on Touchstone Small and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Ab Global.
Diversification Opportunities for Touchstone Small and Ab Global
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and GCEAX is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Touchstone Small i.e., Touchstone Small and Ab Global go up and down completely randomly.
Pair Corralation between Touchstone Small and Ab Global
Assuming the 90 days horizon Touchstone Small is expected to generate 1.16 times less return on investment than Ab Global. In addition to that, Touchstone Small is 1.43 times more volatile than Ab Global E. It trades about 0.05 of its total potential returns per unit of risk. Ab Global E is currently generating about 0.09 per unit of volatility. If you would invest 1,303 in Ab Global E on September 12, 2024 and sell it today you would earn a total of 486.00 from holding Ab Global E or generate 37.3% 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. Ab Global E
Performance |
| Timeline |
| Touchstone Small Cap |
| Ab Global E |
Touchstone Small and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Ab Global
The main advantage of trading using opposite Touchstone Small and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Touchstone Small vs. Smallcap Growth Fund | Touchstone Small vs. Mutual Of America | Touchstone Small vs. Aqr Small Cap | Touchstone Small vs. Scout Small Cap |
| Ab Global vs. Ab Small Cap | Ab Global vs. Lebenthal Lisanti Small | Ab Global vs. Mutual Of America | Ab Global vs. Touchstone Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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