Correlation Between John Hancock and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both John Hancock and Intermediate Government 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 Intermediate Government 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 Intermediate Government Bond, you can compare the effects of market volatilities on John Hancock and Intermediate Government 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 Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Intermediate Government.
Diversification Opportunities for John Hancock and Intermediate Government
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Intermediate is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government 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 Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of John Hancock i.e., John Hancock and Intermediate Government go up and down completely randomly.
Pair Corralation between John Hancock and Intermediate Government
Considering the 90-day investment horizon John Hancock Financial is expected to generate 18.42 times more return on investment than Intermediate Government. However, John Hancock is 18.42 times more volatile than Intermediate Government Bond. It trades about 0.29 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.07 per unit of risk. If you would invest 3,503 in John Hancock Financial on November 8, 2024 and sell it today you would earn a total of 307.00 from holding John Hancock Financial or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Intermediate Government Bond
Performance |
| Timeline |
| John Hancock Financial |
| Intermediate Government |
John Hancock and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Intermediate Government
The main advantage of trading using opposite John Hancock and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government'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 |
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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