Correlation Between Touchstone Small and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Advent Claymore 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 Advent Claymore 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 Advent Claymore Convertible, you can compare the effects of market volatilities on Touchstone Small and Advent Claymore 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 Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Advent Claymore.
Diversification Opportunities for Touchstone Small and Advent Claymore
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Advent is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv 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 Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Touchstone Small i.e., Touchstone Small and Advent Claymore go up and down completely randomly.
Pair Corralation between Touchstone Small and Advent Claymore
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.52 times more return on investment than Advent Claymore. However, Touchstone Small is 1.52 times more volatile than Advent Claymore Convertible. It trades about 0.03 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about -0.02 per unit of risk. If you would invest 3,342 in Touchstone Small Cap on October 13, 2024 and sell it today you would earn a total of 400.00 from holding Touchstone Small Cap or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Advent Claymore Convertible
Performance |
| Timeline |
| Touchstone Small Cap |
| Advent Claymore Conv |
Touchstone Small and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Advent Claymore
The main advantage of trading using opposite Touchstone Small and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Advent Claymore 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 Advent Claymore will offset losses from the drop in Advent Claymore's long position.| Touchstone Small vs. Dws Equity Sector | Touchstone Small vs. Smallcap World Fund | Touchstone Small vs. Siit Equity Factor | Touchstone Small vs. Qs Global Equity |
| Advent Claymore vs. Touchstone Small Cap | Advent Claymore vs. Sp Smallcap 600 | Advent Claymore vs. Lebenthal Lisanti Small | Advent Claymore vs. Ab 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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