Correlation Between Astar and John Hancock
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and John Hancock Global, you can compare the effects of market volatilities on Astar 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 Astar with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and John Hancock.
Diversification Opportunities for Astar and John Hancock
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astar and John is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astar 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 Astar 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 Astar 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 Astar i.e., Astar and John Hancock go up and down completely randomly.
Pair Corralation between Astar and John Hancock
Assuming the 90 days trading horizon Astar is expected to generate 4.73 times more return on investment than John Hancock. However, Astar is 4.73 times more volatile than John Hancock Global. It trades about 0.05 of its potential returns per unit of risk. John Hancock Global is currently generating about -0.07 per unit of risk. If you would invest 6.20 in Astar on October 20, 2024 and sell it today you would earn a total of 0.16 from holding Astar or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Astar vs. John Hancock Global
Performance |
| Timeline |
| Astar |
| John Hancock Global |
Astar and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and John Hancock
The main advantage of trading using opposite Astar and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and John Hancock Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| John Hancock vs. Delaware Emerging Markets | John Hancock vs. Angel Oak Multi Strategy | John Hancock vs. Western Assets Emerging | John Hancock vs. Inverse Nasdaq 100 Strategy |
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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