Correlation Between Barings Active and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Barings Active and Touchstone Premium 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 Barings Active and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Touchstone Premium Yield, you can compare the effects of market volatilities on Barings Active and Touchstone Premium 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 Barings Active with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Touchstone Premium.
Diversification Opportunities for Barings Active and Touchstone Premium
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Touchstone is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Touchstone Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Premium Yield and Barings Active 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 Barings Active Short are associated (or correlated) with Touchstone Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Premium Yield has no effect on the direction of Barings Active i.e., Barings Active and Touchstone Premium go up and down completely randomly.
Pair Corralation between Barings Active and Touchstone Premium
Assuming the 90 days horizon Barings Active is expected to generate 2.2 times less return on investment than Touchstone Premium. But when comparing it to its historical volatility, Barings Active Short is 6.26 times less risky than Touchstone Premium. It trades about 0.17 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Touchstone Premium Yield on August 30, 2024 and sell it today you would earn a total of 207.00 from holding Touchstone Premium Yield or generate 30.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Touchstone Premium Yield
Performance |
| Timeline |
| Barings Active Short |
| Touchstone Premium Yield |
Barings Active and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Touchstone Premium
The main advantage of trading using opposite Barings Active and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Touchstone Premium 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 Premium will offset losses from the drop in Touchstone Premium's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Touchstone Premium vs. Europacific Growth Fund | Touchstone Premium vs. Europacific Growth Fund | Touchstone Premium vs. Europacific Growth Fund | Touchstone Premium vs. Europacific Growth Fund |
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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