Correlation Between Touchstone Small and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on Touchstone Small and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Growth Fund.
Diversification Opportunities for Touchstone Small and Growth Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and GROWTH is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Touchstone Small i.e., Touchstone Small and Growth Fund go up and down completely randomly.
Pair Corralation between Touchstone Small and Growth Fund
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.55 times more return on investment than Growth Fund. However, Touchstone Small is 1.55 times more volatile than Growth Fund Of. It trades about 0.22 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.2 per unit of risk. If you would invest 3,873 in Touchstone Small Cap on August 29, 2024 and sell it today you would earn a total of 296.00 from holding Touchstone Small Cap or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Growth Fund Of
Performance |
| Timeline |
| Touchstone Small Cap |
| Growth Fund |
Touchstone Small and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Growth Fund
The main advantage of trading using opposite Touchstone Small and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Touchstone Small vs. T Rowe Price | Touchstone Small vs. Kinetics Global Fund | Touchstone Small vs. Power Global Tactical | Touchstone Small vs. Dreyfusstandish Global Fixed |
| Growth Fund vs. Growth Fund Of | Growth Fund vs. HUMANA INC | Growth Fund vs. Aquagold International | Growth Fund vs. Barloworld Ltd ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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