Correlation Between Touchstone Premium and Federated Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Federated Pennsylvania 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 Federated Pennsylvania 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 Federated Pennsylvania Municipal, you can compare the effects of market volatilities on Touchstone Premium and Federated Pennsylvania 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 Federated Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Federated Pennsylvania.
Diversification Opportunities for Touchstone Premium and Federated Pennsylvania
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Federated is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Federated Pennsylvania Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Pennsylvania 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 Federated Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Pennsylvania has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Federated Pennsylvania go up and down completely randomly.
Pair Corralation between Touchstone Premium and Federated Pennsylvania
Assuming the 90 days horizon Touchstone Premium Yield is expected to generate 4.98 times more return on investment than Federated Pennsylvania. However, Touchstone Premium is 4.98 times more volatile than Federated Pennsylvania Municipal. It trades about 0.09 of its potential returns per unit of risk. Federated Pennsylvania Municipal is currently generating about -0.09 per unit of risk. If you would invest 805.00 in Touchstone Premium Yield on October 21, 2024 and sell it today you would earn a total of 11.00 from holding Touchstone Premium Yield or generate 1.37% 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. Federated Pennsylvania Municip
Performance |
| Timeline |
| Touchstone Premium Yield |
| Federated Pennsylvania |
Touchstone Premium and Federated Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Federated Pennsylvania
The main advantage of trading using opposite Touchstone Premium and Federated Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Federated Pennsylvania 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 Federated Pennsylvania will offset losses from the drop in Federated Pennsylvania's long position.| Touchstone Premium vs. Alternative Asset Allocation | Touchstone Premium vs. Rational Strategic Allocation | Touchstone Premium vs. Gmo Global Equity | Touchstone Premium vs. Enhanced Large Pany |
| Federated Pennsylvania vs. Federated Emerging Market | Federated Pennsylvania vs. Federated Mdt All | Federated Pennsylvania vs. Federated Mdt Balanced | Federated Pennsylvania vs. Federated Global Allocation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |