Correlation Between Touchstone Premium and Blue Chip
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Blue Chip 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 Blue Chip 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 Blue Chip Fund, you can compare the effects of market volatilities on Touchstone Premium and Blue Chip 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 Blue Chip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Blue Chip.
Diversification Opportunities for Touchstone Premium and Blue Chip
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Touchstone and Blue is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Blue Chip Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Fund 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 Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Fund has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Blue Chip go up and down completely randomly.
Pair Corralation between Touchstone Premium and Blue Chip
Assuming the 90 days horizon Touchstone Premium is expected to generate 1.74 times less return on investment than Blue Chip. In addition to that, Touchstone Premium is 1.06 times more volatile than Blue Chip Fund. It trades about 0.07 of its total potential returns per unit of risk. Blue Chip Fund is currently generating about 0.13 per unit of volatility. If you would invest 2,720 in Blue Chip Fund on September 13, 2024 and sell it today you would earn a total of 2,032 from holding Blue Chip Fund or generate 74.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Premium Yield vs. Blue Chip Fund
Performance |
| Timeline |
| Touchstone Premium Yield |
| Blue Chip Fund |
Touchstone Premium and Blue Chip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and Blue Chip
The main advantage of trading using opposite Touchstone Premium and Blue Chip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Blue Chip 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 Blue Chip will offset losses from the drop in Blue Chip's long position.| Touchstone Premium vs. Scharf Global Opportunity | Touchstone Premium vs. Commonwealth Global Fund | Touchstone Premium vs. Artisan Global Unconstrained | Touchstone Premium vs. Investec Global Franchise |
| Blue Chip vs. Morningstar Defensive Bond | Blue Chip vs. Doubleline Yield Opportunities | Blue Chip vs. Ambrus Core Bond | Blue Chip vs. Touchstone Premium Yield |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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