Correlation Between Copeland Risk and Touchstone Sands

Can any of the company-specific risk be diversified away by investing in both Copeland Risk and Touchstone Sands 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 Copeland Risk and Touchstone Sands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Copeland Risk Managed and Touchstone Sands Capital, you can compare the effects of market volatilities on Copeland Risk and Touchstone Sands 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 Copeland Risk with a short position of Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copeland Risk and Touchstone Sands.

Diversification Opportunities for Copeland Risk and Touchstone Sands

-0.33

Correlation Coefficient

Copeland Risk  Touchstone Sands

Very good diversification

The 3 months correlation between Copeland and Touchstone is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital and Copeland Risk 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 Copeland Risk Managed are associated (or correlated) with Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Copeland Risk i.e., Copeland Risk and Touchstone Sands go up and down completely randomly.

Pair Corralation between Copeland Risk and Touchstone Sands

Assuming the 90 days horizon Copeland Risk Managed is expected to under-perform the Touchstone Sands. In addition to that, Copeland Risk is 1.38 times more volatile than Touchstone Sands Capital. It trades about -0.11 of its total potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.12 per unit of volatility. If you would invest  1,500  in Touchstone Sands Capital on October 24, 2024 and sell it today you would earn a total of  151.00  from holding Touchstone Sands Capital or generate 10.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Copeland Risk Managed  vs.  Touchstone Sands Capital

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Touchstone Sands Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Sands Capital are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Touchstone Sands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Copeland Risk and Touchstone Sands

The main advantage of trading using opposite Copeland Risk and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copeland Risk position performs unexpectedly, Touchstone Sands 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 Sands will offset losses from the drop in Touchstone Sands' long position.

The idea behind Copeland Risk Managed and Touchstone Sands Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.