Correlation Between John Hancock and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both John Hancock and Federated Hermes 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 Federated Hermes 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 Federated Hermes Conservative, you can compare the effects of market volatilities on John Hancock and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Federated Hermes.
Diversification Opportunities for John Hancock and Federated Hermes
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Federated is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Federated Hermes Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Con 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Con has no effect on the direction of John Hancock i.e., John Hancock and Federated Hermes go up and down completely randomly.
Pair Corralation between John Hancock and Federated Hermes
Considering the 90-day investment horizon John Hancock Financial is expected to generate 17.06 times more return on investment than Federated Hermes. However, John Hancock is 17.06 times more volatile than Federated Hermes Conservative. It trades about 0.13 of its potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.22 per unit of risk. If you would invest 3,557 in John Hancock Financial on October 28, 2024 and sell it today you would earn a total of 137.00 from holding John Hancock Financial or generate 3.85% 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. Federated Hermes Conservative
Performance |
| Timeline |
| John Hancock Financial |
| Federated Hermes Con |
John Hancock and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Federated Hermes
The main advantage of trading using opposite John Hancock and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' 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 |
| Federated Hermes vs. Oil Gas Ultrasector | Federated Hermes vs. Salient Mlp Energy | Federated Hermes vs. Pimco Energy Tactical | Federated Hermes vs. Clearbridge Energy Mlp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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