Correlation Between Touchstone Small and The Hartford
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and The Hartford 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 The Hartford 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 The Hartford Emerging, you can compare the effects of market volatilities on Touchstone Small and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and The Hartford.
Diversification Opportunities for Touchstone Small and The Hartford
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Touchstone and The is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and The Hartford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Emerging 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Emerging has no effect on the direction of Touchstone Small i.e., Touchstone Small and The Hartford go up and down completely randomly.
Pair Corralation between Touchstone Small and The Hartford
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 2.19 times more return on investment than The Hartford. However, Touchstone Small is 2.19 times more volatile than The Hartford Emerging. It trades about 0.15 of its potential returns per unit of risk. The Hartford Emerging is currently generating about 0.24 per unit of risk. If you would invest 3,846 in Touchstone Small Cap on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Touchstone Small Cap or generate 2.6% 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. The Hartford Emerging
Performance |
| Timeline |
| Touchstone Small Cap |
| Hartford Emerging |
Touchstone Small and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and The Hartford
The main advantage of trading using opposite Touchstone Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Touchstone Small vs. Tiaa Cref Lifecycle Retirement | Touchstone Small vs. Putnman Retirement Ready | Touchstone Small vs. Tiaa Cref Lifestyle Moderate | Touchstone Small vs. Dimensional Retirement Income |
| The Hartford vs. Artisan High Income | The Hartford vs. Gmo High Yield | The Hartford vs. Pace High Yield | The Hartford vs. Aqr Risk Parity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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