Correlation Between Touchstone Premium and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Voya Vacs 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 Voya Vacs 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 Voya Vacs Index, you can compare the effects of market volatilities on Touchstone Premium and Voya Vacs 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 Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Voya Vacs.
Diversification Opportunities for Touchstone Premium and Voya Vacs
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Touchstone and Voya is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index 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 Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Voya Vacs go up and down completely randomly.
Pair Corralation between Touchstone Premium and Voya Vacs
Assuming the 90 days horizon Touchstone Premium Yield is expected to under-perform the Voya Vacs. In addition to that, Touchstone Premium is 3.61 times more volatile than Voya Vacs Index. It trades about -0.09 of its total potential returns per unit of risk. Voya Vacs Index is currently generating about 0.12 per unit of volatility. If you would invest 1,155 in Voya Vacs Index on September 17, 2024 and sell it today you would earn a total of 14.00 from holding Voya Vacs Index or generate 1.21% 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. Voya Vacs Index
Performance |
Timeline |
Touchstone Premium Yield |
Voya Vacs Index |
Touchstone Premium and Voya Vacs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Touchstone Premium and Voya Vacs
The main advantage of trading using opposite Touchstone Premium and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.Touchstone Premium vs. Dodge Cox Stock | Touchstone Premium vs. Rational Strategic Allocation | Touchstone Premium vs. Morningstar Unconstrained Allocation | Touchstone Premium vs. Aqr Large Cap |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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