Correlation Between Touchstone Sustainability and Champlain Small

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

By analyzing existing cross correlation between Touchstone Sustainability And and Champlain Small, you can compare the effects of market volatilities on Touchstone Sustainability and Champlain Small 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 Sustainability with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sustainability and Champlain Small.

Diversification Opportunities for Touchstone Sustainability and Champlain Small

-0.48

Correlation Coefficient

Touchstone Sustainability  Champlain Small

Very good diversification

The 3 months correlation between Touchstone and Champlain is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sustainability And and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Touchstone Sustainability 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 Sustainability And are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Touchstone Sustainability i.e., Touchstone Sustainability and Champlain Small go up and down completely randomly.

Pair Corralation between Touchstone Sustainability and Champlain Small

Assuming the 90 days horizon Touchstone Sustainability is expected to generate 54.08 times less return on investment than Champlain Small. But when comparing it to its historical volatility, Touchstone Sustainability And is 1.34 times less risky than Champlain Small. It trades about 0.0 of its potential returns per unit of risk. Champlain Small is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,255  in Champlain Small on September 3, 2024 and sell it today you would earn a total of  297.00  from holding Champlain Small or generate 13.17% return on investment over 90 days.

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

Touchstone Sustainability And  vs.  Champlain Small

Touchstone Sustainability

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Touchstone Sustainability And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Touchstone Sustainability is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Champlain Small

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Champlain Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Touchstone Sustainability and Champlain Small

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

The idea behind Touchstone Sustainability And and Champlain Small 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.