Correlation Between Wasatch Global and Touchstone Mid
Can any of the company-specific risk be diversified away by investing in both Wasatch Global and Touchstone Mid 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 Wasatch Global and Touchstone Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Global Opportunities and Touchstone Mid Cap, you can compare the effects of market volatilities on Wasatch Global and Touchstone Mid 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 Wasatch Global with a short position of Touchstone Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Global and Touchstone Mid.
Diversification Opportunities for Wasatch Global and Touchstone Mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wasatch and Touchstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Global Opportunities and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap and Wasatch Global 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 Wasatch Global Opportunities are associated (or correlated) with Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of Wasatch Global i.e., Wasatch Global and Touchstone Mid go up and down completely randomly.
Pair Corralation between Wasatch Global and Touchstone Mid
Assuming the 90 days horizon Wasatch Global is expected to generate 1.25 times less return on investment than Touchstone Mid. But when comparing it to its historical volatility, Wasatch Global Opportunities is 1.02 times less risky than Touchstone Mid. It trades about 0.09 of its potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,428 in Touchstone Mid Cap on September 2, 2024 and sell it today you would earn a total of 1,109 from holding Touchstone Mid Cap or generate 32.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Global Opportunities vs. Touchstone Mid Cap
Performance |
| Timeline |
| Wasatch Global Oppor |
| Touchstone Mid Cap |
Wasatch Global and Touchstone Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Global and Touchstone Mid
The main advantage of trading using opposite Wasatch Global and Touchstone Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Global position performs unexpectedly, Touchstone Mid 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 Mid will offset losses from the drop in Touchstone Mid's long position.| Wasatch Global vs. Wasatch Large Cap | Wasatch Global vs. Wasatch Micro Cap | Wasatch Global vs. Wasatch Ultra Growth | Wasatch Global vs. Wasatch Micro Cap |
| Touchstone Mid vs. Artisan High Income | Touchstone Mid vs. Pioneer High Yield | Touchstone Mid vs. Dunham High Yield | Touchstone Mid vs. Siit High Yield |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |