Correlation Between Gmo High and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Gmo High 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 Gmo High and Touchstone Sands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Touchstone Sands Capital, you can compare the effects of market volatilities on Gmo High 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 Gmo High with a short position of Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Touchstone Sands.
Diversification Opportunities for Gmo High and Touchstone Sands
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Touchstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield 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 Gmo High 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 Gmo High Yield 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 Gmo High i.e., Gmo High and Touchstone Sands go up and down completely randomly.
Pair Corralation between Gmo High and Touchstone Sands
Assuming the 90 days horizon Gmo High is expected to generate 2.28 times less return on investment than Touchstone Sands. But when comparing it to its historical volatility, Gmo High Yield is 6.71 times less risky than Touchstone Sands. It trades about 0.14 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,703 in Touchstone Sands Capital on April 3, 2025 and sell it today you would earn a total of 325.00 from holding Touchstone Sands Capital or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Touchstone Sands Capital
Performance |
| Timeline |
| Gmo High Yield |
| Touchstone Sands Capital |
Gmo High and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Touchstone Sands
The main advantage of trading using opposite Gmo High and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High 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.| Gmo High vs. Dreyfus High Yield | Gmo High vs. Blackrock High Yield | Gmo High vs. Jpmorgan High Yield | Gmo High vs. Federated High Yield |
| Touchstone Sands vs. Fidelity Advisor Health | Touchstone Sands vs. Vanguard Health Care | Touchstone Sands vs. Fidelity Advisor Health | Touchstone Sands vs. Vanguard Health Care |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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