Correlation Between Touchstone Premium and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Equity, you can compare the effects of market volatilities on Touchstone Premium and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Goldman Sachs.
Diversification Opportunities for Touchstone Premium and Goldman Sachs
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Touchstone and Goldman is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Equity has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Goldman Sachs go up and down completely randomly.
Pair Corralation between Touchstone Premium and Goldman Sachs
Assuming the 90 days horizon Touchstone Premium is expected to generate 1.56 times less return on investment than Goldman Sachs. In addition to that, Touchstone Premium is 1.53 times more volatile than Goldman Sachs Equity. It trades about 0.06 of its total potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.13 per unit of volatility. If you would invest 1,629 in Goldman Sachs Equity on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Goldman Sachs Equity or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Goldman Sachs Equity
Performance |
| Timeline |
| Touchstone Premium Yield |
| Goldman Sachs Equity |
Touchstone Premium and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Goldman Sachs
The main advantage of trading using opposite Touchstone Premium and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Touchstone Premium vs. Dodge Cox Emerging | Touchstone Premium vs. Jpmorgan Emerging Markets | Touchstone Premium vs. Templeton Emerging Markets | Touchstone Premium vs. Legg Mason Partners |
| Goldman Sachs vs. Dreyfusstandish Global Fixed | Goldman Sachs vs. Touchstone Premium Yield | Goldman Sachs vs. Ambrus Core Bond | Goldman Sachs vs. Maryland Tax Free Bond |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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