Correlation Between International Business and Touchstone Mid
Can any of the company-specific risk be diversified away by investing in both International Business and Touchstone Mid 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 International Business and Touchstone Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and Touchstone Mid Cap, you can compare the effects of market volatilities on International Business and Touchstone Mid 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 International Business with a short position of Touchstone Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Touchstone Mid.
Diversification Opportunities for International Business and Touchstone Mid
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Touchstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap and International Business 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 International Business Machines are associated (or correlated) with Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of International Business i.e., International Business and Touchstone Mid go up and down completely randomly.
Pair Corralation between International Business and Touchstone Mid
Considering the 90-day investment horizon International Business Machines is expected to generate 1.96 times more return on investment than Touchstone Mid. However, International Business is 1.96 times more volatile than Touchstone Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.19 per unit of risk. If you would invest 24,022 in International Business Machines on April 30, 2025 and sell it today you would earn a total of 2,299 from holding International Business Machines or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Touchstone Mid Cap
Performance |
| Timeline |
| International Business |
| Touchstone Mid Cap |
International Business and Touchstone Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Touchstone Mid
The main advantage of trading using opposite International Business and Touchstone Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Touchstone Mid 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 Mid will offset losses from the drop in Touchstone Mid's long position.| International Business vs. Accenture plc | International Business vs. BigBearai Holdings | International Business vs. Cisco Systems | International Business vs. Fiserv, |
| Touchstone Mid vs. Mid Cap Growth | Touchstone Mid vs. Federated Mdt Small | Touchstone Mid vs. Causeway International Value | Touchstone Mid vs. Virtus Kar Small Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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