Correlation Between Amcap Fund and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Amcap Fund 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 Amcap Fund and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcap Fund Class and Touchstone Premium Yield, you can compare the effects of market volatilities on Amcap Fund 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 Amcap Fund with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and Touchstone Premium.
Diversification Opportunities for Amcap Fund and Touchstone Premium
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amcap and Touchstone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class 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 Amcap Fund 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 Amcap Fund Class 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 Amcap Fund i.e., Amcap Fund and Touchstone Premium go up and down completely randomly.
Pair Corralation between Amcap Fund and Touchstone Premium
Assuming the 90 days horizon Amcap Fund is expected to generate 1.61 times less return on investment than Touchstone Premium. In addition to that, Amcap Fund is 1.06 times more volatile than Touchstone Premium Yield. It trades about 0.12 of its total potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.2 per unit of volatility. If you would invest 882.00 in Touchstone Premium Yield on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Touchstone Premium Yield or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcap Fund Class vs. Touchstone Premium Yield
Performance |
| Timeline |
| Amcap Fund Class |
| Touchstone Premium Yield |
Amcap Fund and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and Touchstone Premium
The main advantage of trading using opposite Amcap Fund and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund 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.| Amcap Fund vs. Doubleline Yield Opportunities | Amcap Fund vs. The National Tax Free | Amcap Fund vs. Franklin High Yield | Amcap Fund vs. Pace High Yield |
| Touchstone Premium vs. Scharf Global Opportunity | Touchstone Premium vs. Commonwealth Global Fund | Touchstone Premium vs. Artisan Global Unconstrained | Touchstone Premium vs. Investec Global Franchise |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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