Correlation Between Touchstone Large and John Hancock
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and John Hancock 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 Large and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Pany and John Hancock Financial, you can compare the effects of market volatilities on Touchstone Large and John Hancock 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 Large with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and John Hancock.
Diversification Opportunities for Touchstone Large and John Hancock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and John is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Pany and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Touchstone Large 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 Large Pany are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Financial has no effect on the direction of Touchstone Large i.e., Touchstone Large and John Hancock go up and down completely randomly.
Pair Corralation between Touchstone Large and John Hancock
Assuming the 90 days horizon Touchstone Large Pany is expected to generate 0.62 times more return on investment than John Hancock. However, Touchstone Large Pany is 1.62 times less risky than John Hancock. It trades about 0.09 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.03 per unit of risk. If you would invest 3,681 in Touchstone Large Pany on October 9, 2024 and sell it today you would earn a total of 2,196 from holding Touchstone Large Pany or generate 59.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Pany vs. John Hancock Financial
Performance |
| Timeline |
| Touchstone Large Pany |
| John Hancock Financial |
Touchstone Large and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and John Hancock
The main advantage of trading using opposite Touchstone Large and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Touchstone Sands Capital | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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