Correlation Between John Hancock and Fairholme Focused
Can any of the company-specific risk be diversified away by investing in both John Hancock and Fairholme Focused 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 Fairholme Focused 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 The Fairholme Focused, you can compare the effects of market volatilities on John Hancock and Fairholme Focused 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 Fairholme Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Fairholme Focused.
Diversification Opportunities for John Hancock and Fairholme Focused
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Fairholme is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and The Fairholme Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fairholme Focused 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 Fairholme Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fairholme Focused has no effect on the direction of John Hancock i.e., John Hancock and Fairholme Focused go up and down completely randomly.
Pair Corralation between John Hancock and Fairholme Focused
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.77 times more return on investment than Fairholme Focused. However, John Hancock is 2.77 times more volatile than The Fairholme Focused. It trades about 0.2 of its potential returns per unit of risk. The Fairholme Focused is currently generating about 0.27 per unit of risk. If you would invest 3,540 in John Hancock Financial on November 4, 2024 and sell it today you would earn a total of 211.00 from holding John Hancock Financial or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. The Fairholme Focused
Performance |
| Timeline |
| John Hancock Financial |
| Fairholme Focused |
John Hancock and Fairholme Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Fairholme Focused
The main advantage of trading using opposite John Hancock and Fairholme Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Fairholme Focused 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 Fairholme Focused will offset losses from the drop in Fairholme Focused'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 |
| Fairholme Focused vs. L Abbett Growth | Fairholme Focused vs. Growth Portfolio Class | Fairholme Focused vs. Vanguard Growth And | Fairholme Focused vs. Rational Defensive Growth |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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