Correlation Between SCOR PK and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both SCOR PK 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 SCOR PK and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Touchstone Premium Yield, you can compare the effects of market volatilities on SCOR PK 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 SCOR PK with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Touchstone Premium.
Diversification Opportunities for SCOR PK and Touchstone Premium
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCOR and Touchstone is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK 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 SCOR PK 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 SCOR PK 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 SCOR PK i.e., SCOR PK and Touchstone Premium go up and down completely randomly.
Pair Corralation between SCOR PK and Touchstone Premium
Assuming the 90 days horizon SCOR PK is expected to generate 3.81 times more return on investment than Touchstone Premium. However, SCOR PK is 3.81 times more volatile than Touchstone Premium Yield. It trades about 0.32 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.2 per unit of risk. If you would invest 214.00 in SCOR PK on September 13, 2024 and sell it today you would earn a total of 42.00 from holding SCOR PK or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Touchstone Premium Yield
Performance |
| Timeline |
| SCOR PK |
| Touchstone Premium Yield |
SCOR PK and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Touchstone Premium
The main advantage of trading using opposite SCOR PK and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK 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.The idea behind SCOR PK and Touchstone Premium Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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