Correlation Between Amg River and John Hancock
Can any of the company-specific risk be diversified away by investing in both Amg River 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 Amg River and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and John Hancock Ii, you can compare the effects of market volatilities on Amg River 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 Amg River with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and John Hancock.
Diversification Opportunities for Amg River and John Hancock
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and John is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and John Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Ii and Amg River 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 Amg River Road 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 Ii has no effect on the direction of Amg River i.e., Amg River and John Hancock go up and down completely randomly.
Pair Corralation between Amg River and John Hancock
Assuming the 90 days horizon Amg River Road is expected to under-perform the John Hancock. In addition to that, Amg River is 1.63 times more volatile than John Hancock Ii. It trades about -0.02 of its total potential returns per unit of risk. John Hancock Ii is currently generating about 0.0 per unit of volatility. If you would invest 1,734 in John Hancock Ii on October 9, 2024 and sell it today you would lose (58.00) from holding John Hancock Ii or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. John Hancock Ii
Performance |
| Timeline |
| Amg River Road |
| John Hancock Ii |
Amg River and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and John Hancock
The main advantage of trading using opposite Amg River and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River 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.| Amg River vs. Pear Tree Polaris | Amg River vs. Artisan Global Value | Amg River vs. Amg River Road | Amg River vs. Tcw Relative Value |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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