Correlation Between Voya High and Touchstone International
Can any of the company-specific risk be diversified away by investing in both Voya High and Touchstone International 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 Voya High and Touchstone International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Touchstone International Equity, you can compare the effects of market volatilities on Voya High and Touchstone International 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 Voya High with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Touchstone International.
Diversification Opportunities for Voya High and Touchstone International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and Touchstone is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Touchstone International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Voya 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 Voya High Yield are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of Voya High i.e., Voya High and Touchstone International go up and down completely randomly.
Pair Corralation between Voya High and Touchstone International
Assuming the 90 days horizon Voya High is expected to generate 2.52 times less return on investment than Touchstone International. But when comparing it to its historical volatility, Voya High Yield is 3.3 times less risky than Touchstone International. It trades about 0.31 of its potential returns per unit of risk. Touchstone International Equity is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,377 in Touchstone International Equity on October 28, 2024 and sell it today you would earn a total of 44.00 from holding Touchstone International Equity or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Touchstone International Equit
Performance |
| Timeline |
| Voya High Yield |
| Touchstone International |
Voya High and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Touchstone International
The main advantage of trading using opposite Voya High and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Touchstone International 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 International will offset losses from the drop in Touchstone International's long position.| Voya High vs. Guidemark Large Cap | Voya High vs. Ab Large Cap | Voya High vs. Ab Large Cap | Voya High vs. Avantis Large Cap |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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