Correlation Between Touchstone Funds and Icon Bond

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

By analyzing existing cross correlation between Touchstone Funds Group and Icon Bond Fund, you can compare the effects of market volatilities on Touchstone Funds and Icon Bond 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 Funds with a short position of Icon Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Funds and Icon Bond.

Diversification Opportunities for Touchstone Funds and Icon Bond

0.94

Correlation Coefficient

Touchstone Funds  Icon Bond

Almost no diversification

The 3 months correlation between Touchstone and Icon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Funds Group and Icon Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Bond Fund and Touchstone Funds 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 Funds Group are associated (or correlated) with Icon Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Bond Fund has no effect on the direction of Touchstone Funds i.e., Touchstone Funds and Icon Bond go up and down completely randomly.

Pair Corralation between Touchstone Funds and Icon Bond

Assuming the 90 days horizon Touchstone Funds Group is expected to generate 2.44 times more return on investment than Icon Bond. However, Touchstone Funds is 2.44 times more volatile than Icon Bond Fund. It trades about 0.16 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.3 per unit of risk. If you would invest  885.00  in Touchstone Funds Group on May 18, 2025 and sell it today you would earn a total of  26.00  from holding Touchstone Funds Group or generate 2.94% return on investment over 90 days.

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

Touchstone Funds Group  vs.  Icon Bond Fund

Touchstone Funds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Funds Group are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Touchstone Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Icon Bond Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Bond Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Icon Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Touchstone Funds and Icon Bond

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

The idea behind Touchstone Funds Group and Icon Bond Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.