Correlation Between John Hancock and Federated
Can any of the company-specific risk be diversified away by investing in both John Hancock and Federated 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 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 U S, you can compare the effects of market volatilities on John Hancock and Federated 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Federated.
Diversification Opportunities for John Hancock and Federated
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and Federated is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of John Hancock i.e., John Hancock and Federated go up and down completely randomly.
Pair Corralation between John Hancock and Federated
Considering the 90-day investment horizon John Hancock Financial is expected to generate 12.04 times more return on investment than Federated. However, John Hancock is 12.04 times more volatile than Federated U S. It trades about 0.1 of its potential returns per unit of risk. Federated U S is currently generating about 0.09 per unit of risk. If you would invest 2,099 in John Hancock Financial on August 30, 2024 and sell it today you would earn a total of 1,829 from holding John Hancock Financial or generate 87.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Federated U S
Performance |
| Timeline |
| John Hancock Financial |
| Federated U S |
John Hancock and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Federated
The main advantage of trading using opposite John Hancock and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| John Hancock vs. Gabelli Global Small | John Hancock vs. MFS Investment Grade | John Hancock vs. Eaton Vance National | John Hancock vs. GAMCO Natural Resources |
| Federated vs. Maryland Short Term Tax Free | Federated vs. Astor Longshort Fund | Federated vs. Franklin Federal Limited Term | Federated vs. Federated Short Intermediate Duration |
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 CEOs Directory module to screen CEOs from public companies around the world.
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