Correlation Between John Hancock and Institutional Fiduciary
Can any of the company-specific risk be diversified away by investing in both John Hancock and Institutional Fiduciary 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 Institutional Fiduciary 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 Institutional Fiduciary Trust, you can compare the effects of market volatilities on John Hancock and Institutional Fiduciary 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 Institutional Fiduciary. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Institutional Fiduciary.
Diversification Opportunities for John Hancock and Institutional Fiduciary
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Institutional is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Institutional Fiduciary Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Institutional Fiduciary 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 Institutional Fiduciary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Institutional Fiduciary has no effect on the direction of John Hancock i.e., John Hancock and Institutional Fiduciary go up and down completely randomly.
Pair Corralation between John Hancock and Institutional Fiduciary
Considering the 90-day investment horizon John Hancock is expected to generate 4.81 times less return on investment than Institutional Fiduciary. But when comparing it to its historical volatility, John Hancock Financial is 11.95 times less risky than Institutional Fiduciary. It trades about 0.1 of its potential returns per unit of risk. Institutional Fiduciary Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Institutional Fiduciary Trust on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Institutional Fiduciary Trust or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
John Hancock Financial vs. Institutional Fiduciary Trust
Performance |
| Timeline |
| John Hancock Financial |
| Institutional Fiduciary |
John Hancock and Institutional Fiduciary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Institutional Fiduciary
The main advantage of trading using opposite John Hancock and Institutional Fiduciary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Institutional Fiduciary 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 Institutional Fiduciary will offset losses from the drop in Institutional Fiduciary'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 |
| Institutional Fiduciary vs. Ab Select Equity | Institutional Fiduciary vs. Ultra Short Fixed Income | Institutional Fiduciary vs. The Hartford Equity | Institutional Fiduciary vs. Doubleline E Fixed |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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