Correlation Between Touchstone Small and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Growth Opportunities 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 Opportunities 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 Opportunities Fund, you can compare the effects of market volatilities on Touchstone Small and Growth Opportunities 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 Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Growth Opportunities.
Diversification Opportunities for Touchstone Small and Growth Opportunities
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and GROWTH is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Touchstone Small i.e., Touchstone Small and Growth Opportunities go up and down completely randomly.
Pair Corralation between Touchstone Small and Growth Opportunities
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.02 times more return on investment than Growth Opportunities. However, Touchstone Small is 1.02 times more volatile than Growth Opportunities Fund. It trades about 0.13 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.11 per unit of risk. If you would invest 3,475 in Touchstone Small Cap on September 2, 2024 and sell it today you would earn a total of 702.00 from holding Touchstone Small Cap or generate 20.2% 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 Opportunities Fund
Performance |
| Timeline |
| Touchstone Small Cap |
| Growth Opportunities |
Touchstone Small and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Growth Opportunities
The main advantage of trading using opposite Touchstone Small and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Growth Opportunities 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 Opportunities will offset losses from the drop in Growth Opportunities' long position.| Touchstone Small vs. Wisdomtree Siegel Global | Touchstone Small vs. Kinetics Global Fund | Touchstone Small vs. Rbc Global Opportunities | Touchstone Small vs. Us Global Investors |
| Growth Opportunities vs. Mid Cap Value Profund | Growth Opportunities vs. Mutual Of America | Growth Opportunities vs. American Century Etf | Growth Opportunities vs. Heartland Value Plus |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |