Correlation Between Touchstone Small and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Touchstone Small and Voya Intermediate 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 Small and Voya Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Voya Intermediate Bond, you can compare the effects of market volatilities on Touchstone Small and Voya Intermediate 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 Small with a short position of Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Voya Intermediate.
Diversification Opportunities for Touchstone Small and Voya Intermediate
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Touchstone and Voya is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond and Touchstone Small 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 Small Cap are associated (or correlated) with Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Touchstone Small i.e., Touchstone Small and Voya Intermediate go up and down completely randomly.
Pair Corralation between Touchstone Small and Voya Intermediate
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 2.65 times more return on investment than Voya Intermediate. However, Touchstone Small is 2.65 times more volatile than Voya Intermediate Bond. It trades about 0.07 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about 0.06 per unit of risk. If you would invest 3,197 in Touchstone Small Cap on September 2, 2024 and sell it today you would earn a total of 980.00 from holding Touchstone Small Cap or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Voya Intermediate Bond
Performance |
| Timeline |
| Touchstone Small Cap |
| Voya Intermediate Bond |
Touchstone Small and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Voya Intermediate
The main advantage of trading using opposite Touchstone Small and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small position performs unexpectedly, Voya Intermediate 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 Voya Intermediate will offset losses from the drop in Voya Intermediate's long position.| Touchstone Small vs. Wisdomtree Siegel Global | Touchstone Small vs. Kinetics Global Fund | Touchstone Small vs. Rbc Global Opportunities | Touchstone Small vs. Us Global Investors |
| Voya Intermediate vs. Oklahoma College Savings | Voya Intermediate vs. Aqr Managed Futures | Voya Intermediate vs. Aqr Managed Futures | Voya Intermediate vs. Ab Bond Inflation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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