Correlation Between City National and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Touchstone Premium Yield, you can compare the effects of market volatilities on City National 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 City National with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Touchstone Premium.
Diversification Opportunities for City National and Touchstone Premium
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between City and Touchstone is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale 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 City National 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 City National Rochdale 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 City National i.e., City National and Touchstone Premium go up and down completely randomly.
Pair Corralation between City National and Touchstone Premium
Assuming the 90 days horizon City National is expected to generate 4.59 times less return on investment than Touchstone Premium. But when comparing it to its historical volatility, City National Rochdale is 17.23 times less risky than Touchstone Premium. It trades about 1.0 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 807.00 in Touchstone Premium Yield on November 4, 2024 and sell it today you would earn a total of 46.00 from holding Touchstone Premium Yield or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Touchstone Premium Yield
Performance |
| Timeline |
| City National Rochdale |
| Touchstone Premium Yield |
City National and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Touchstone Premium
The main advantage of trading using opposite City National and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.| City National vs. Goldman Sachs Financial | City National vs. Icon Financial Fund | City National vs. Financials Ultrasector Profund | City National vs. John Hancock Financial |
| Touchstone Premium vs. 1919 Financial Services | Touchstone Premium vs. Goldman Sachs Financial | Touchstone Premium vs. Mesirow Financial Small | Touchstone Premium vs. Vanguard Financials Index |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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