Correlation Between BlackRock Capital and John Hancock
Can any of the company-specific risk be diversified away by investing in both BlackRock Capital 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 BlackRock Capital and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Capital Allocation and John Hancock Financial, you can compare the effects of market volatilities on BlackRock Capital 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 BlackRock Capital with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and John Hancock.
Diversification Opportunities for BlackRock Capital and John Hancock
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BlackRock and John is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation 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 BlackRock Capital 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 BlackRock Capital Allocation 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 BlackRock Capital i.e., BlackRock Capital and John Hancock go up and down completely randomly.
Pair Corralation between BlackRock Capital and John Hancock
Given the investment horizon of 90 days BlackRock Capital Allocation is expected to generate 0.44 times more return on investment than John Hancock. However, BlackRock Capital Allocation is 2.27 times less risky than John Hancock. It trades about 0.07 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 1,148 in BlackRock Capital Allocation on November 1, 2024 and sell it today you would earn a total of 393.00 from holding BlackRock Capital Allocation or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Capital Allocation vs. John Hancock Financial
Performance |
| Timeline |
| BlackRock Capital |
| John Hancock Financial |
BlackRock Capital and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Capital and John Hancock
The main advantage of trading using opposite BlackRock Capital and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital 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.| BlackRock Capital vs. BlackRock Health Sciences | BlackRock Capital vs. BlackRock Science and | BlackRock Capital vs. Neuberger Berman Next | BlackRock Capital vs. Virtus Allianzgi Artificial |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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