Correlation Between Touchstone Premium and John Hancock
Can any of the company-specific risk be diversified away by investing in both Touchstone Premium 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 Premium 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 Premium Yield and John Hancock Global, you can compare the effects of market volatilities on Touchstone Premium 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 Premium with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and John Hancock.
Diversification Opportunities for Touchstone Premium and John Hancock
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and John is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Touchstone Premium 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 Premium Yield 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 Global has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and John Hancock go up and down completely randomly.
Pair Corralation between Touchstone Premium and John Hancock
Assuming the 90 days horizon Touchstone Premium is expected to generate 1.35 times less return on investment than John Hancock. In addition to that, Touchstone Premium is 1.71 times more volatile than John Hancock Global. It trades about 0.06 of its total potential returns per unit of risk. John Hancock Global is currently generating about 0.14 per unit of volatility. If you would invest 1,028 in John Hancock Global on September 5, 2024 and sell it today you would earn a total of 227.00 from holding John Hancock Global or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Touchstone Premium Yield vs. John Hancock Global
Performance |
| Timeline |
| Touchstone Premium Yield |
| John Hancock Global |
Touchstone Premium and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Premium and John Hancock
The main advantage of trading using opposite Touchstone Premium and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Premium 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 Premium vs. Pioneer High Yield | Touchstone Premium vs. Dunham High Yield | Touchstone Premium vs. Pgim High Yield | Touchstone Premium vs. Gmo High Yield |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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