Correlation Between John Hancock and Hood River
Can any of the company-specific risk be diversified away by investing in both John Hancock and Hood River 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 Hood River 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 Hood River New, you can compare the effects of market volatilities on John Hancock and Hood River 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 Hood River. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Hood River.
Diversification Opportunities for John Hancock and Hood River
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Hood is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Hood River New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hood River New 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 Hood River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hood River New has no effect on the direction of John Hancock i.e., John Hancock and Hood River go up and down completely randomly.
Pair Corralation between John Hancock and Hood River
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Hood River. But the fund apears to be less risky and, when comparing its historical volatility, John Hancock Financial is 1.44 times less risky than Hood River. The fund trades about -0.06 of its potential returns per unit of risk. The Hood River New is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,355 in Hood River New on September 14, 2024 and sell it today you would earn a total of 37.00 from holding Hood River New or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Hood River New
Performance |
| Timeline |
| John Hancock Financial |
| Hood River New |
John Hancock and Hood River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Hood River
The main advantage of trading using opposite John Hancock and Hood River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Hood River 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 Hood River will offset losses from the drop in Hood River'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 |
| Hood River vs. Icon Information Technology | Hood River vs. Firsthand Technology Opportunities | Hood River vs. Columbia Global Technology | Hood River vs. Biotechnology Ultrasector Profund |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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