Correlation Between Fisher Investments and Touchstone Dividend

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

By analyzing existing cross correlation between Fisher Large Cap and Touchstone Dividend Equity, you can compare the effects of market volatilities on Fisher Investments and Touchstone Dividend 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 Fisher Investments with a short position of Touchstone Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and Touchstone Dividend.

Diversification Opportunities for Fisher Investments and Touchstone Dividend

0.44

Correlation Coefficient

Fisher Investments  Touchstone Dividend

Very weak diversification

The 3 months correlation between Fisher and Touchstone is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Touchstone Dividend Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Dividend and Fisher Investments 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 Fisher Large Cap are associated (or correlated) with Touchstone Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Dividend has no effect on the direction of Fisher Investments i.e., Fisher Investments and Touchstone Dividend go up and down completely randomly.

Pair Corralation between Fisher Investments and Touchstone Dividend

Assuming the 90 days horizon Fisher Large Cap is expected to under-perform the Touchstone Dividend. In addition to that, Fisher Investments is 1.43 times more volatile than Touchstone Dividend Equity. It trades about -0.09 of its total potential returns per unit of risk. Touchstone Dividend Equity is currently generating about 0.02 per unit of volatility. If you would invest  1,798  in Touchstone Dividend Equity on December 23, 2024 and sell it today you would earn a total of  13.00  from holding Touchstone Dividend Equity or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fisher Large Cap  vs.  Touchstone Dividend Equity

Fisher Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Touchstone Dividend

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Dividend Equity are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Touchstone Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fisher Investments and Touchstone Dividend

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

The idea behind Fisher Large Cap and Touchstone Dividend Equity 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.