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 Bond 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
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Touchstone is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond 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 Bond 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 is expected to generate 2.75 times less return on investment than Touchstone Premium. But when comparing it to its historical volatility, John Hancock Bond is 2.7 times less risky than Touchstone Premium. It trades about 0.2 of its potential returns per unit of risk. Touchstone Premium Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 882.00 in Touchstone Premium Yield on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Touchstone Premium Yield or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Bond vs. Touchstone Premium Yield
Performance |
| Timeline |
| John Hancock Bond |
| 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. The National Tax Free | John Hancock vs. Alliancebernstein National Municipal | John Hancock vs. Dws Government Money |
| Touchstone Premium vs. Scharf Global Opportunity | Touchstone Premium vs. Commonwealth Global Fund | Touchstone Premium vs. Artisan Global Unconstrained | Touchstone Premium vs. Investec Global Franchise |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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