Correlation Between Tocqueville International and Large Cap

Can any of the company-specific risk be diversified away by investing in both Tocqueville International and Large Cap 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 Tocqueville International and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Tocqueville International and Large Cap Fund, you can compare the effects of market volatilities on Tocqueville International and Large Cap 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 Tocqueville International with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tocqueville International and Large Cap.

Diversification Opportunities for Tocqueville International and Large Cap

0.9

Correlation Coefficient

Tocqueville International  Large Cap

Almost no diversification

The 3 months correlation between Tocqueville and Large is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Tocqueville International and Large Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Fund and Tocqueville International 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 The Tocqueville International are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Fund has no effect on the direction of Tocqueville International i.e., Tocqueville International and Large Cap go up and down completely randomly.

Pair Corralation between Tocqueville International and Large Cap

Assuming the 90 days horizon The Tocqueville International is expected to generate 0.93 times more return on investment than Large Cap. However, The Tocqueville International is 1.08 times less risky than Large Cap. It trades about 0.34 of its potential returns per unit of risk. Large Cap Fund is currently generating about 0.09 per unit of risk. If you would invest  1,627  in The Tocqueville International on May 5, 2025 and sell it today you would earn a total of  272.00  from holding The Tocqueville International or generate 16.72% return on investment over 90 days.

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

The Tocqueville International  vs.  Large Cap Fund

Tocqueville International

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Tocqueville International are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Tocqueville International showed solid returns over the last few months and may actually be approaching a breakup point.

Large Cap Fund

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Large Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tocqueville International and Large Cap

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

The idea behind The Tocqueville International and Large Cap 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.