Correlation Between Touchstone Premium and Calvert Us

Can any of the company-specific risk be diversified away by investing in both Touchstone Premium and Calvert Us 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 Calvert Us 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 Calvert Large Cap, you can compare the effects of market volatilities on Touchstone Premium and Calvert Us 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 Calvert Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Calvert Us.

Diversification Opportunities for Touchstone Premium and Calvert Us

0.89

Correlation Coefficient

Touchstone Premium  Calvert Us

Very poor diversification

The 3 months correlation between Touchstone and Calvert is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Calvert Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap 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 Calvert Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Calvert Us go up and down completely randomly.

Pair Corralation between Touchstone Premium and Calvert Us

Assuming the 90 days horizon Touchstone Premium is expected to generate 1.53 times less return on investment than Calvert Us. In addition to that, Touchstone Premium is 1.24 times more volatile than Calvert Large Cap. It trades about 0.02 of its total potential returns per unit of risk. Calvert Large Cap is currently generating about 0.04 per unit of volatility. If you would invest  2,753  in Calvert Large Cap on October 13, 2024 and sell it today you would earn a total of  471.00  from holding Calvert Large Cap or generate 17.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Touchstone Premium Yield  vs.  Calvert Large Cap

Touchstone Premium Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Touchstone Premium Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Calvert Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Touchstone Premium and Calvert Us

The main advantage of trading using opposite Touchstone Premium and Calvert Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium position performs unexpectedly, Calvert Us 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 Calvert Us will offset losses from the drop in Calvert Us' long position.

The idea behind Touchstone Premium Yield and Calvert Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.