Correlation Between John Hancock and Elfun Trusts
Can any of the company-specific risk be diversified away by investing in both John Hancock and Elfun Trusts 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 Elfun Trusts 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 Elfun Trusts Elfun, you can compare the effects of market volatilities on John Hancock and Elfun Trusts 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 Elfun Trusts. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Elfun Trusts.
Diversification Opportunities for John Hancock and Elfun Trusts
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Elfun is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Elfun Trusts Elfun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Trusts Elfun 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 Elfun Trusts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Trusts Elfun has no effect on the direction of John Hancock i.e., John Hancock and Elfun Trusts go up and down completely randomly.
Pair Corralation between John Hancock and Elfun Trusts
Considering the 90-day investment horizon John Hancock is expected to generate 1.22 times less return on investment than Elfun Trusts. In addition to that, John Hancock is 2.16 times more volatile than Elfun Trusts Elfun. It trades about 0.05 of its total potential returns per unit of risk. Elfun Trusts Elfun is currently generating about 0.13 per unit of volatility. If you would invest 5,768 in Elfun Trusts Elfun on September 5, 2024 and sell it today you would earn a total of 4,205 from holding Elfun Trusts Elfun or generate 72.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
John Hancock Financial vs. Elfun Trusts Elfun
Performance |
| Timeline |
| John Hancock Financial |
| Elfun Trusts Elfun |
John Hancock and Elfun Trusts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Elfun Trusts
The main advantage of trading using opposite John Hancock and Elfun Trusts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Elfun Trusts 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 Elfun Trusts will offset losses from the drop in Elfun Trusts' 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 |
| Elfun Trusts vs. Nuveen Minnesota Municipal | Elfun Trusts vs. Morningstar Municipal Bond | Elfun Trusts vs. Transamerica Funds | Elfun Trusts vs. California High Yield Municipal |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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