Correlation Between Touchstone Premium and Mfs International
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Mfs International 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 Mfs International 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 Mfs International New, you can compare the effects of market volatilities on Touchstone Premium and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Mfs International.
Diversification Opportunities for Touchstone Premium and Mfs International
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Mfs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International New has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Mfs International go up and down completely randomly.
Pair Corralation between Touchstone Premium and Mfs International
Assuming the 90 days horizon Touchstone Premium Yield is expected to generate 0.93 times more return on investment than Mfs International. However, Touchstone Premium Yield is 1.07 times less risky than Mfs International. It trades about 0.22 of its potential returns per unit of risk. Mfs International New is currently generating about -0.07 per unit of risk. If you would invest 870.00 in Touchstone Premium Yield on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Touchstone Premium Yield or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Mfs International New
Performance |
| Timeline |
| Touchstone Premium Yield |
| Mfs International New |
Touchstone Premium and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Mfs International
The main advantage of trading using opposite Touchstone Premium and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's 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 |
| Mfs International vs. Ab Bond Inflation | Mfs International vs. Touchstone Premium Yield | Mfs International vs. The National Tax Free | Mfs International vs. Dreyfusstandish Global Fixed |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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