Correlation Between John Hancock and Bts Managed
Can any of the company-specific risk be diversified away by investing in both John Hancock and Bts Managed 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 John Hancock and Bts Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Financial and Bts Managed Income, you can compare the effects of market volatilities on John Hancock and Bts Managed 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 John Hancock with a short position of Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Bts Managed.
Diversification Opportunities for John Hancock and Bts Managed
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Bts is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income and John Hancock 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 John Hancock Financial are associated (or correlated) with Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of John Hancock i.e., John Hancock and Bts Managed go up and down completely randomly.
Pair Corralation between John Hancock and Bts Managed
Considering the 90-day investment horizon John Hancock Financial is expected to generate 6.0 times more return on investment than Bts Managed. However, John Hancock is 6.0 times more volatile than Bts Managed Income. It trades about 0.1 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.12 per unit of risk. If you would invest 2,807 in John Hancock Financial on September 12, 2024 and sell it today you would earn a total of 1,085 from holding John Hancock Financial or generate 38.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Bts Managed Income
Performance |
| Timeline |
| John Hancock Financial |
| Bts Managed Income |
John Hancock and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Bts Managed
The main advantage of trading using opposite John Hancock and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
| Bts Managed vs. Transamerica Financial Life | Bts Managed vs. Blackrock Financial Institutions | Bts Managed vs. Angel Oak Financial | Bts Managed vs. John Hancock Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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