Correlation Between Touchstone Sands and First Trust
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands and First Trust 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 First Trust 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 First Trust Short, you can compare the effects of market volatilities on Touchstone Sands and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and First Trust.
Diversification Opportunities for Touchstone Sands and First Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and First is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Short has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and First Trust go up and down completely randomly.
Pair Corralation between Touchstone Sands and First Trust
Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 6.81 times more return on investment than First Trust. However, Touchstone Sands is 6.81 times more volatile than First Trust Short. It trades about 0.16 of its potential returns per unit of risk. First Trust Short is currently generating about 0.23 per unit of risk. If you would invest 2,024 in Touchstone Sands Capital on April 26, 2025 and sell it today you would earn a total of 68.00 from holding Touchstone Sands Capital or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. First Trust Short
Performance |
| Timeline |
| Touchstone Sands Capital |
| First Trust Short |
Touchstone Sands and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and First Trust
The main advantage of trading using opposite Touchstone Sands and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Touchstone Sands vs. Goldman Sachs Small | Touchstone Sands vs. Principal Lifetime Hybrid | Touchstone Sands vs. Vanguard Strategic Small Cap | Touchstone Sands vs. Harbor International Small |
| First Trust vs. Franklin Adjustable Government | First Trust vs. T Rowe Price | First Trust vs. Government Securities Fund | First Trust vs. Aim Investment Secs |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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