Correlation Between John Hancock and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dreyfus Technology 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 Dreyfus Technology 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 Dreyfus Technology Growth, you can compare the effects of market volatilities on John Hancock and Dreyfus Technology 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 Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dreyfus Technology.
Diversification Opportunities for John Hancock and Dreyfus Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Dreyfus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth 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 Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of John Hancock i.e., John Hancock and Dreyfus Technology go up and down completely randomly.
Pair Corralation between John Hancock and Dreyfus Technology
Considering the 90-day investment horizon John Hancock is expected to generate 2.35 times less return on investment than Dreyfus Technology. In addition to that, John Hancock is 1.38 times more volatile than Dreyfus Technology Growth. It trades about 0.03 of its total potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.1 per unit of volatility. If you would invest 3,944 in Dreyfus Technology Growth on September 19, 2024 and sell it today you would earn a total of 3,817 from holding Dreyfus Technology Growth or generate 96.78% 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. Dreyfus Technology Growth
Performance |
| Timeline |
| John Hancock Financial |
| Dreyfus Technology Growth |
John Hancock and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Dreyfus Technology
The main advantage of trading using opposite John Hancock and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology'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 |
| Dreyfus Technology vs. John Hancock Financial | Dreyfus Technology vs. Blackrock Financial Institutions | Dreyfus Technology vs. Angel Oak Financial | Dreyfus Technology vs. Prudential Jennison 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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