Correlation Between Touchstone Ultra and Huber Capital

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

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

Diversification Opportunities for Touchstone Ultra and Huber Capital

-0.65

Correlation Coefficient

Touchstone Ultra  Huber Capital

Excellent diversification

The 3 months correlation between Touchstone and Huber is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Ultra Short and Huber Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Mid and Touchstone Ultra 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 Ultra Short are associated (or correlated) with Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Mid has no effect on the direction of Touchstone Ultra i.e., Touchstone Ultra and Huber Capital go up and down completely randomly.

Pair Corralation between Touchstone Ultra and Huber Capital

Assuming the 90 days horizon Touchstone Ultra Short is expected to generate 0.08 times more return on investment than Huber Capital. However, Touchstone Ultra Short is 11.99 times less risky than Huber Capital. It trades about 0.2 of its potential returns per unit of risk. Huber Capital Mid is currently generating about -0.09 per unit of risk. If you would invest  912.00  in Touchstone Ultra Short on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Touchstone Ultra Short or generate 1.32% return on investment over 90 days.

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

Touchstone Ultra Short  vs.  Huber Capital Mid

Touchstone Ultra Short

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Ultra Short are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Touchstone Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Huber Capital Mid

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Touchstone Ultra and Huber Capital

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

The idea behind Touchstone Ultra Short and Huber Capital Mid 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.