Correlation Between John Hancock and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both John Hancock and Touchstone Large 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 John Hancock and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Global and Touchstone Large Cap, you can compare the effects of market volatilities on John Hancock and Touchstone Large 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 John Hancock with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Touchstone Large.
Diversification Opportunities for John Hancock and Touchstone Large
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between John and Touchstone is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Global and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and John Hancock 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 John Hancock Global are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of John Hancock i.e., John Hancock and Touchstone Large go up and down completely randomly.
Pair Corralation between John Hancock and Touchstone Large
Assuming the 90 days horizon John Hancock is expected to generate 1.39 times less return on investment than Touchstone Large. But when comparing it to its historical volatility, John Hancock Global is 1.12 times less risky than Touchstone Large. It trades about 0.13 of its potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,803 in Touchstone Large Cap on September 3, 2024 and sell it today you would earn a total of 260.00 from holding Touchstone Large Cap or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Global vs. Touchstone Large Cap
Performance |
| Timeline |
| John Hancock Global |
| Touchstone Large Cap |
John Hancock and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Touchstone Large
The main advantage of trading using opposite John Hancock and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Touchstone Large 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 Touchstone Large will offset losses from the drop in Touchstone Large's long position.| John Hancock vs. Dodge Global Stock | John Hancock vs. T Rowe Price | John Hancock vs. Franklin Mutual Global | John Hancock vs. T Rowe Price |
| Touchstone Large vs. Small Cap Stock | Touchstone Large vs. Omni Small Cap Value | Touchstone Large vs. Volumetric Fund Volumetric | Touchstone Large vs. Issachar Fund Class |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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