Correlation Between Touchstone Small and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Bny Mellon 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 Bny Mellon 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 Bny Mellon National, you can compare the effects of market volatilities on Touchstone Small and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Bny Mellon.
Diversification Opportunities for Touchstone Small and Bny Mellon
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Bny is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Bny Mellon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon National 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon National has no effect on the direction of Touchstone Small i.e., Touchstone Small and Bny Mellon go up and down completely randomly.
Pair Corralation between Touchstone Small and Bny Mellon
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 5.25 times more return on investment than Bny Mellon. However, Touchstone Small is 5.25 times more volatile than Bny Mellon National. It trades about 0.1 of its potential returns per unit of risk. Bny Mellon National is currently generating about 0.06 per unit of risk. If you would invest 3,888 in Touchstone Small Cap on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Touchstone Small Cap or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Touchstone Small Cap vs. Bny Mellon National
Performance |
| Timeline |
| Touchstone Small Cap |
| Bny Mellon National |
Touchstone Small and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Bny Mellon
The main advantage of trading using opposite Touchstone Small and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.| Touchstone Small vs. Jhancock Real Estate | Touchstone Small vs. Real Estate Ultrasector | Touchstone Small vs. Short Real Estate | Touchstone Small vs. Pender Real Estate |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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