Correlation Between Stringer Growth and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Stringer Growth 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 Stringer Growth and Touchstone Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stringer Growth Fund and Touchstone Premium Yield, you can compare the effects of market volatilities on Stringer Growth 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 Stringer Growth with a short position of Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stringer Growth and Touchstone Premium.
Diversification Opportunities for Stringer Growth and Touchstone Premium
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stringer and Touchstone is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Stringer Growth Fund 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 Stringer Growth 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 Stringer Growth Fund 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 Stringer Growth i.e., Stringer Growth and Touchstone Premium go up and down completely randomly.
Pair Corralation between Stringer Growth and Touchstone Premium
Assuming the 90 days horizon Stringer Growth Fund is expected to under-perform the Touchstone Premium. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stringer Growth Fund is 1.8 times less risky than Touchstone Premium. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Touchstone Premium Yield is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 879.00 in Touchstone Premium Yield on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Touchstone Premium Yield or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stringer Growth Fund vs. Touchstone Premium Yield
Performance |
| Timeline |
| Stringer Growth |
| Touchstone Premium Yield |
Stringer Growth and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stringer Growth and Touchstone Premium
The main advantage of trading using opposite Stringer Growth and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stringer Growth 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.| Stringer Growth vs. Touchstone Premium Yield | Stringer Growth vs. Multisector Bond Sma | Stringer Growth vs. Versatile Bond Portfolio | Stringer Growth vs. Ab Bond Inflation |
| Touchstone Premium vs. Europacific Growth Fund | Touchstone Premium vs. SCOR PK | Touchstone Premium vs. Morningstar Unconstrained Allocation | Touchstone Premium vs. Thrivent High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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