Correlation Between Touchstone Premium and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Mainstay Balanced 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 Mainstay Balanced 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 Mainstay Balanced Fund, you can compare the effects of market volatilities on Touchstone Premium and Mainstay Balanced 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 Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Mainstay Balanced.
Diversification Opportunities for Touchstone Premium and Mainstay Balanced
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Touchstone and Mainstay is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced 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 Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Touchstone Premium and Mainstay Balanced
Assuming the 90 days horizon Touchstone Premium Yield is expected to generate 1.98 times more return on investment than Mainstay Balanced. However, Touchstone Premium is 1.98 times more volatile than Mainstay Balanced Fund. It trades about 0.07 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.05 per unit of risk. If you would invest 666.00 in Touchstone Premium Yield on September 12, 2024 and sell it today you would earn a total of 248.00 from holding Touchstone Premium Yield or generate 37.24% 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. Mainstay Balanced Fund
Performance |
| Timeline |
| Touchstone Premium Yield |
| Mainstay Balanced |
Touchstone Premium and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Mainstay Balanced
The main advantage of trading using opposite Touchstone Premium and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Mainstay Balanced 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 Mainstay Balanced will offset losses from the drop in Mainstay Balanced's long position.| Touchstone Premium vs. Europacific Growth Fund | Touchstone Premium vs. SCOR PK | Touchstone Premium vs. Morningstar Unconstrained Allocation | Touchstone Premium vs. Thrivent High Yield |
| Mainstay Balanced vs. Pgim Jennison Technology | Mainstay Balanced vs. Blackrock Science Technology | Mainstay Balanced vs. Mfs Technology Fund | Mainstay Balanced vs. Vanguard Information Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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