Correlation Between Touchstone Sands and High Yield
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands and High Yield 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 Touchstone Sands and High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and High Yield Fund, you can compare the effects of market volatilities on Touchstone Sands and High Yield 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 Touchstone Sands with a short position of High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and High Yield.
Diversification Opportunities for Touchstone Sands and High Yield
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and High is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund and Touchstone Sands 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 Touchstone Sands Capital are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and High Yield go up and down completely randomly.
Pair Corralation between Touchstone Sands and High Yield
Assuming the 90 days horizon Touchstone Sands is expected to generate 1.12 times less return on investment than High Yield. In addition to that, Touchstone Sands is 3.43 times more volatile than High Yield Fund. It trades about 0.03 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.13 per unit of volatility. If you would invest 666.00 in High Yield Fund on August 31, 2024 and sell it today you would earn a total of 112.00 from holding High Yield Fund or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. High Yield Fund
Performance |
| Timeline |
| Touchstone Sands Capital |
| High Yield Fund |
Touchstone Sands and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and High Yield
The main advantage of trading using opposite Touchstone Sands and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Touchstone Sands vs. Pear Tree Polaris | Touchstone Sands vs. Artisan High Income | Touchstone Sands vs. HUMANA INC | Touchstone Sands vs. Aquagold International |
| High Yield vs. Vanguard High Yield Corporate | High Yield vs. Vanguard High Yield Porate | High Yield vs. Blackrock Hi Yld | High Yield vs. Blackrock 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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