Correlation Between Vanguard FTSE and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Touchstone ETF 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 Vanguard FTSE and Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and Touchstone ETF Trust, you can compare the effects of market volatilities on Vanguard FTSE and Touchstone ETF 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 Vanguard FTSE with a short position of Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Touchstone ETF.
Diversification Opportunities for Vanguard FTSE and Touchstone ETF
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Touchstone is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Touchstone ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone ETF Trust and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with Touchstone ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone ETF Trust has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Touchstone ETF go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Touchstone ETF
Considering the 90-day investment horizon Vanguard FTSE Developed is expected to generate 13.13 times more return on investment than Touchstone ETF. However, Vanguard FTSE is 13.13 times more volatile than Touchstone ETF Trust. It trades about 0.03 of its potential returns per unit of risk. Touchstone ETF Trust is currently generating about 0.38 per unit of risk. If you would invest 4,809 in Vanguard FTSE Developed on September 1, 2024 and sell it today you would earn a total of 221.00 from holding Vanguard FTSE Developed or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. Touchstone ETF Trust
Performance |
| Timeline |
| Vanguard FTSE Developed |
| Touchstone ETF Trust |
Vanguard FTSE and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Touchstone ETF
The main advantage of trading using opposite Vanguard FTSE and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Touchstone ETF 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 Touchstone ETF will offset losses from the drop in Touchstone ETF's long position.| Vanguard FTSE vs. iShares ESG Aggregate | Vanguard FTSE vs. SPDR MSCI Emerging | Vanguard FTSE vs. Aquagold International | Vanguard FTSE vs. Thrivent High Yield |
| Touchstone ETF vs. iShares Interest Rate | Touchstone ETF vs. iShares Interest Rate | Touchstone ETF vs. iShares Edge Investment | Touchstone ETF vs. iShares Inflation Hedged |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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