Correlation Between Mainstay High and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Mainstay 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 Mainstay 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 Mainstay High Yield and Touchstone Premium Yield, you can compare the effects of market volatilities on Mainstay 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 Mainstay High with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Touchstone Premium.
Diversification Opportunities for Mainstay High and Touchstone Premium
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mainstay and Touchstone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay 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 Mainstay 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 Mainstay 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 Mainstay High i.e., Mainstay High and Touchstone Premium go up and down completely randomly.
Pair Corralation between Mainstay High and Touchstone Premium
Assuming the 90 days horizon Mainstay High is expected to generate 7.15 times less return on investment than Touchstone Premium. But when comparing it to its historical volatility, Mainstay High Yield is 3.84 times less risky than Touchstone Premium. It trades about 0.12 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Touchstone Premium Yield on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Touchstone Premium Yield or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Touchstone Premium Yield
Performance |
| Timeline |
| Mainstay High Yield |
| Touchstone Premium Yield |
Mainstay High and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Touchstone Premium
The main advantage of trading using opposite Mainstay High and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay 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.| Mainstay High vs. Touchstone Premium Yield | Mainstay High vs. Ambrus Core Bond | Mainstay High vs. California Bond Fund | Mainstay High vs. Multisector Bond Sma |
| Touchstone Premium vs. Dodge Cox Emerging | Touchstone Premium vs. Jpmorgan Emerging Markets | Touchstone Premium vs. Templeton Emerging Markets | Touchstone Premium vs. Legg Mason Partners |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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