Correlation Between John Hancock and Hennessy Equity
Can any of the company-specific risk be diversified away by investing in both John Hancock and Hennessy Equity 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 Hennessy Equity 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 Hennessy Equity And, you can compare the effects of market volatilities on John Hancock and Hennessy Equity 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 Hennessy Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Hennessy Equity.
Diversification Opportunities for John Hancock and Hennessy Equity
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between John and Hennessy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Hennessy Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Equity And 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 Hennessy Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Equity And has no effect on the direction of John Hancock i.e., John Hancock and Hennessy Equity go up and down completely randomly.
Pair Corralation between John Hancock and Hennessy Equity
Considering the 90-day investment horizon John Hancock Financial is expected to generate 3.56 times more return on investment than Hennessy Equity. However, John Hancock is 3.56 times more volatile than Hennessy Equity And. It trades about 0.17 of its potential returns per unit of risk. Hennessy Equity And is currently generating about 0.11 per unit of risk. If you would invest 3,492 in John Hancock Financial on October 21, 2024 and sell it today you would earn a total of 176.00 from holding John Hancock Financial or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Hennessy Equity And
Performance |
| Timeline |
| John Hancock Financial |
| Hennessy Equity And |
John Hancock and Hennessy Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Hennessy Equity
The main advantage of trading using opposite John Hancock and Hennessy Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Hennessy Equity 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 Hennessy Equity will offset losses from the drop in Hennessy Equity'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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