Correlation Between Dunham High and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Dunham High 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 Dunham High and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Touchstone Premium Yield, you can compare the effects of market volatilities on Dunham High 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 Dunham High with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Touchstone Premium.
Diversification Opportunities for Dunham High and Touchstone Premium
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Touchstone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield 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 Dunham High 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 Dunham High Yield 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 Dunham High i.e., Dunham High and Touchstone Premium go up and down completely randomly.
Pair Corralation between Dunham High and Touchstone Premium
Assuming the 90 days horizon Dunham High is expected to generate 5.43 times less return on investment than Touchstone Premium. But when comparing it to its historical volatility, Dunham High Yield is 5.9 times less risky than Touchstone Premium. It trades about 0.22 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Touchstone Premium Yield
Performance |
| Timeline |
| Dunham High Yield |
| Touchstone Premium Yield |
Dunham High and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Touchstone Premium
The main advantage of trading using opposite Dunham High and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High 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.| Dunham High vs. Fulcrum Diversified Absolute | Dunham High vs. Wealthbuilder Conservative Allocation | Dunham High vs. Aqr Diversified Arbitrage | Dunham High vs. Allianzgi Diversified Income |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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