Correlation Between John Hancock and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both John Hancock and Touchstone Premium 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 Premium 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 Premium Yield, you can compare the effects of market volatilities on John Hancock and Touchstone Premium 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 Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Touchstone Premium.
Diversification Opportunities for John Hancock and Touchstone Premium
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Touchstone is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Global and Touchstone Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Premium Yield 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 Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Premium Yield has no effect on the direction of John Hancock i.e., John Hancock and Touchstone Premium go up and down completely randomly.
Pair Corralation between John Hancock and Touchstone Premium
Assuming the 90 days horizon John Hancock Global is expected to generate 0.59 times more return on investment than Touchstone Premium. However, John Hancock Global is 1.71 times less risky than Touchstone Premium. It trades about 0.14 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.06 per unit of risk. If you would invest 1,028 in John Hancock Global on September 4, 2024 and sell it today you would earn a total of 229.00 from holding John Hancock Global or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Global vs. Touchstone Premium Yield
Performance |
| Timeline |
| John Hancock Global |
| Touchstone Premium Yield |
John Hancock and Touchstone Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Touchstone Premium
The main advantage of trading using opposite John Hancock and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Touchstone Premium 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 Premium will offset losses from the drop in Touchstone Premium's long position.| John Hancock vs. Touchstone Premium Yield | John Hancock vs. California Bond Fund | John Hancock vs. Bbh Intermediate Municipal | John Hancock vs. Versatile Bond Portfolio |
| Touchstone Premium vs. Touchstone Small Cap | Touchstone Premium vs. Touchstone Sands Capital | Touchstone Premium vs. Mid Cap Growth | Touchstone Premium vs. Mid Cap Growth |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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