Correlation Between Touchstone Sands and New Horizon
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands and New Horizon 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 Sands and New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and New Horizon Group, you can compare the effects of market volatilities on Touchstone Sands and New Horizon 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 Sands with a short position of New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and New Horizon.
Diversification Opportunities for Touchstone Sands and New Horizon
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and New is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and New Horizon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Group and Touchstone Sands 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 Sands Capital are associated (or correlated) with New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Group has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and New Horizon go up and down completely randomly.
Pair Corralation between Touchstone Sands and New Horizon
Assuming the 90 days horizon Touchstone Sands Capital is expected to under-perform the New Horizon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Touchstone Sands Capital is 4.12 times less risky than New Horizon. The mutual fund trades about -0.15 of its potential returns per unit of risk. The New Horizon Group is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 36,990 in New Horizon Group on January 26, 2024 and sell it today you would earn a total of 18,810 from holding New Horizon Group or generate 50.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Touchstone Sands Capital vs. New Horizon Group
Performance |
| Timeline |
| Touchstone Sands Capital |
| New Horizon Group |
Touchstone Sands and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and New Horizon
The main advantage of trading using opposite Touchstone Sands and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Touchstone Sands vs. Amana Income Fund | Touchstone Sands vs. Amana Income Fund | Touchstone Sands vs. Amana Developing World | Touchstone Sands vs. Amana Developing World |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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