Correlation Between Touchstone Small and Global Concentrated
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Global Concentrated 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 Global Concentrated 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 Global Centrated Portfolio, you can compare the effects of market volatilities on Touchstone Small and Global Concentrated 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 Global Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Global Concentrated.
Diversification Opportunities for Touchstone Small and Global Concentrated
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Global Centrated Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Centrated Por 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 Global Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Centrated Por has no effect on the direction of Touchstone Small i.e., Touchstone Small and Global Concentrated go up and down completely randomly.
Pair Corralation between Touchstone Small and Global Concentrated
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.81 times more return on investment than Global Concentrated. However, Touchstone Small is 1.81 times more volatile than Global Centrated Portfolio. It trades about 0.3 of its potential returns per unit of risk. Global Centrated Portfolio is currently generating about 0.26 per unit of risk. If you would invest 3,810 in Touchstone Small Cap on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Touchstone Small Cap or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Touchstone Small Cap vs. Global Centrated Portfolio
Performance |
| Timeline |
| Touchstone Small Cap |
| Global Centrated Por |
Touchstone Small and Global Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Global Concentrated
The main advantage of trading using opposite Touchstone Small and Global Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Global Concentrated 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 Global Concentrated will offset losses from the drop in Global Concentrated's long position.| Touchstone Small vs. Cutler Equity | Touchstone Small vs. Scharf Fund Retail | Touchstone Small vs. Huber Capital Equity | Touchstone Small vs. Icon Equity Income |
| Global Concentrated vs. Emerging Markets Equity | Global Concentrated vs. Global Fixed Income | Global Concentrated vs. Global Fixed Income | Global Concentrated vs. Global Fixed Income |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |