Correlation Between John Hancock and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both John Hancock and Franklin Emerging 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 Franklin Emerging 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 Franklin Emerging Market, you can compare the effects of market volatilities on John Hancock and Franklin Emerging 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 Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Franklin Emerging.
Diversification Opportunities for John Hancock and Franklin Emerging
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market 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 Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of John Hancock i.e., John Hancock and Franklin Emerging go up and down completely randomly.
Pair Corralation between John Hancock and Franklin Emerging
Considering the 90-day investment horizon John Hancock Financial is expected to generate 5.51 times more return on investment than Franklin Emerging. However, John Hancock is 5.51 times more volatile than Franklin Emerging Market. It trades about 0.03 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.11 per unit of risk. If you would invest 2,958 in John Hancock Financial on October 11, 2024 and sell it today you would earn a total of 535.00 from holding John Hancock Financial or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Franklin Emerging Market
Performance |
| Timeline |
| John Hancock Financial |
| Franklin Emerging Market |
John Hancock and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Franklin Emerging
The main advantage of trading using opposite John Hancock and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Franklin Emerging 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 Franklin Emerging will offset losses from the drop in Franklin Emerging'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 |
| Franklin Emerging vs. John Hancock Financial | Franklin Emerging vs. Mesirow Financial Small | Franklin Emerging vs. Icon Financial Fund | Franklin Emerging vs. Prudential Financial Services |
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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