Correlation Between Touchstone Large and Voya Target
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Voya Target 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 Large and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Voya Target Retirement, you can compare the effects of market volatilities on Touchstone Large and Voya Target 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 Large with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Voya Target.
Diversification Opportunities for Touchstone Large and Voya Target
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Voya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and Touchstone Large 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 Large Cap are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Touchstone Large i.e., Touchstone Large and Voya Target go up and down completely randomly.
Pair Corralation between Touchstone Large and Voya Target
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 1.29 times more return on investment than Voya Target. However, Touchstone Large is 1.29 times more volatile than Voya Target Retirement. It trades about 0.4 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.28 per unit of risk. If you would invest 1,947 in Touchstone Large Cap on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Touchstone Large Cap or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Voya Target Retirement
Performance |
| Timeline |
| Touchstone Large Cap |
| Voya Target Retirement |
Touchstone Large and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Voya Target
The main advantage of trading using opposite Touchstone Large and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Voya Target 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 Voya Target will offset losses from the drop in Voya Target's long position.| Touchstone Large vs. Small Cap Stock | Touchstone Large vs. Omni Small Cap Value | Touchstone Large vs. Volumetric Fund Volumetric | Touchstone Large vs. Issachar Fund Class |
| Voya Target vs. Goldman Sachs Financial | Voya Target vs. John Hancock Financial | Voya Target vs. Prudential Jennison Financial | Voya Target vs. Icon Financial Fund |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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