Correlation Between BlackRock ETF and John Hancock
Can any of the company-specific risk be diversified away by investing in both BlackRock ETF 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 ETF 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 ETF Trust and John Hancock Exchange, you can compare the effects of market volatilities on BlackRock ETF 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 ETF with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ETF and John Hancock.
Diversification Opportunities for BlackRock ETF and John Hancock
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BlackRock and John is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ETF Trust and John Hancock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and BlackRock ETF 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 ETF Trust 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 Exchange has no effect on the direction of BlackRock ETF i.e., BlackRock ETF and John Hancock go up and down completely randomly.
Pair Corralation between BlackRock ETF and John Hancock
Given the investment horizon of 90 days BlackRock ETF is expected to generate 2.33 times less return on investment than John Hancock. But when comparing it to its historical volatility, BlackRock ETF Trust is 4.02 times less risky than John Hancock. It trades about 0.16 of its potential returns per unit of risk. John Hancock Exchange is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,629 in John Hancock Exchange on August 30, 2024 and sell it today you would earn a total of 1,136 from holding John Hancock Exchange or generate 43.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.37% |
| Values | Daily Returns |
BlackRock ETF Trust vs. John Hancock Exchange
Performance |
| Timeline |
| BlackRock ETF Trust |
| John Hancock Exchange |
BlackRock ETF and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ETF and John Hancock
The main advantage of trading using opposite BlackRock ETF and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ETF 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 ETF vs. BlackRock ETF Trust | BlackRock ETF vs. Aris Water Solutions | BlackRock ETF vs. Pacer Cash Cows |
| John Hancock vs. iShares MSCI USA | John Hancock vs. ABIVAX Socit Anonyme | John Hancock vs. HUMANA INC | John Hancock vs. SCOR PK |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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