Correlation Between Touchstone Premium and Fidelity Municipal
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Fidelity Municipal 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 Premium and Fidelity Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Premium Yield and Fidelity Municipal Income, you can compare the effects of market volatilities on Touchstone Premium and Fidelity Municipal 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 Premium with a short position of Fidelity Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Fidelity Municipal.
Diversification Opportunities for Touchstone Premium and Fidelity Municipal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Fidelity is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Fidelity Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Municipal Income and Touchstone Premium 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 Premium Yield are associated (or correlated) with Fidelity Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Municipal Income has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Fidelity Municipal go up and down completely randomly.
Pair Corralation between Touchstone Premium and Fidelity Municipal
Assuming the 90 days horizon Touchstone Premium Yield is expected to generate 17.74 times more return on investment than Fidelity Municipal. However, Touchstone Premium is 17.74 times more volatile than Fidelity Municipal Income. It trades about 0.06 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about 0.18 per unit of risk. If you would invest 776.00 in Touchstone Premium Yield on September 2, 2024 and sell it today you would earn a total of 118.00 from holding Touchstone Premium Yield or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Fidelity Municipal Income
Performance |
| Timeline |
| Touchstone Premium Yield |
| Fidelity Municipal Income |
Touchstone Premium and Fidelity Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Fidelity Municipal
The main advantage of trading using opposite Touchstone Premium and Fidelity Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Fidelity Municipal 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 Fidelity Municipal will offset losses from the drop in Fidelity Municipal's long position.| Touchstone Premium vs. Ashmore Emerging Markets | Touchstone Premium vs. Eagle Mlp Strategy | Touchstone Premium vs. Ep Emerging Markets | Touchstone Premium vs. Black Oak Emerging |
| Fidelity Municipal vs. Fidelity Freedom 2015 | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Pennsylvania Municipal |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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