Correlation Between High Yield and Toroso Investments

Can any of the company-specific risk be diversified away by investing in both High Yield and Toroso Investments 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 High Yield and Toroso Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between High Yield Municipal Fund and Toroso Investments, you can compare the effects of market volatilities on High Yield and Toroso Investments 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 High Yield with a short position of Toroso Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Toroso Investments.

Diversification Opportunities for High Yield and Toroso Investments

-0.6

Correlation Coefficient

High Yield  Toroso Investments

Excellent diversification

The 3 months correlation between High and Toroso is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Toroso Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toroso Investments and High Yield 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 High Yield Municipal Fund are associated (or correlated) with Toroso Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toroso Investments has no effect on the direction of High Yield i.e., High Yield and Toroso Investments go up and down completely randomly.

Pair Corralation between High Yield and Toroso Investments

Assuming the 90 days horizon High Yield is expected to generate 3.44 times less return on investment than Toroso Investments. But when comparing it to its historical volatility, High Yield Municipal Fund is 3.58 times less risky than Toroso Investments. It trades about 0.1 of its potential returns per unit of risk. Toroso Investments is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,609  in Toroso Investments on September 16, 2025 and sell it today you would earn a total of  26.00  from holding Toroso Investments or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	51.56%
Values	Daily Returns

High Yield Municipal Fund  vs.  Toroso Investments

High Yield Municipal

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in High Yield Municipal Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, High Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Toroso Investments

Risk-Adjusted Performance

Fair

Over the last 90 days Toroso Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Toroso Investments is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with High Yield and Toroso Investments

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

The idea behind High Yield Municipal Fund and Toroso Investments 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.