Correlation Between Barloworld and John Hancock
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and John Hancock Disciplined, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and John Hancock.
Diversification Opportunities for Barloworld and John Hancock
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barloworld and John is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Barloworld 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 Barloworld Ltd ADR 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 Disciplined has no effect on the direction of Barloworld i.e., Barloworld and John Hancock go up and down completely randomly.
Pair Corralation between Barloworld and John Hancock
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 6.02 times more return on investment than John Hancock. However, Barloworld is 6.02 times more volatile than John Hancock Disciplined. It trades about 0.04 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.02 per unit of risk. If you would invest 459.00 in Barloworld Ltd ADR on November 27, 2024 and sell it today you would earn a total of 66.00 from holding Barloworld Ltd ADR or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.89% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. John Hancock Disciplined
Performance |
| Timeline |
| Barloworld ADR |
| John Hancock Disciplined |
Barloworld and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and John Hancock
The main advantage of trading using opposite Barloworld and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| John Hancock vs. John Hancock Disciplined | John Hancock vs. John Hancock Bond | John Hancock vs. Us Global Leaders | John Hancock vs. Mfs International Value |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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