Correlation Between Touchstone Premium and Mainstay Tax
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Mainstay Tax 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 Tax 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 Tax Free, you can compare the effects of market volatilities on Touchstone Premium and Mainstay Tax 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 Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Mainstay Tax.
Diversification Opportunities for Touchstone Premium and Mainstay Tax
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Mainstay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Mainstay Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Tax Free 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 Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Tax Free has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Mainstay Tax go up and down completely randomly.
Pair Corralation between Touchstone Premium and Mainstay Tax
Assuming the 90 days horizon Touchstone Premium Yield is expected to generate 4.65 times more return on investment than Mainstay Tax. However, Touchstone Premium is 4.65 times more volatile than Mainstay Tax Free. It trades about 0.26 of its potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.05 per unit of risk. If you would invest 831.00 in Touchstone Premium Yield on November 27, 2024 and sell it today you would earn a total of 43.00 from holding Touchstone Premium Yield or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Mainstay Tax Free
Performance |
| Timeline |
| Touchstone Premium Yield |
| Mainstay Tax Free |
Touchstone Premium and Mainstay Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Mainstay Tax
The main advantage of trading using opposite Touchstone Premium and Mainstay Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Mainstay Tax 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 Tax will offset losses from the drop in Mainstay Tax's long position.| Touchstone Premium vs. T Rowe Price | Touchstone Premium vs. T Rowe Price | Touchstone Premium vs. Boston Partners Small | Touchstone Premium vs. T Rowe Price |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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