Correlation Between Touchstone Small and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Touchstone Small and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Arrow Managed.
Diversification Opportunities for Touchstone Small and Arrow Managed
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Touchstone and Arrow is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Touchstone Small i.e., Touchstone Small and Arrow Managed go up and down completely randomly.
Pair Corralation between Touchstone Small and Arrow Managed
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.1 times more return on investment than Arrow Managed. However, Touchstone Small is 1.1 times more volatile than Arrow Managed Futures. It trades about 0.21 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.11 per unit of risk. If you would invest 3,873 in Touchstone Small Cap on August 27, 2024 and sell it today you would earn a total of 264.00 from holding Touchstone Small Cap or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Arrow Managed Futures
Performance |
| Timeline |
| Touchstone Small Cap |
| Arrow Managed Futures |
Touchstone Small and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Arrow Managed
The main advantage of trading using opposite Touchstone Small and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Touchstone Small vs. Legg Mason Bw | Touchstone Small vs. Old Westbury Large | Touchstone Small vs. Rational Strategic Allocation | Touchstone Small vs. Goldman Sachs Large |
| Arrow Managed vs. Nationwide Small Cap | Arrow Managed vs. Ab Small Cap | Arrow Managed vs. Qs Small Capitalization | Arrow Managed 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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