Correlation Between John Hancock and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both John Hancock and Ivy Natural 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 Ivy Natural 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 Ivy Natural Resources, you can compare the effects of market volatilities on John Hancock and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ivy Natural.
Diversification Opportunities for John Hancock and Ivy Natural
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Ivy is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of John Hancock i.e., John Hancock and Ivy Natural go up and down completely randomly.
Pair Corralation between John Hancock and Ivy Natural
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Ivy Natural. In addition to that, John Hancock is 1.04 times more volatile than Ivy Natural Resources. It trades about -0.06 of its total potential returns per unit of risk. Ivy Natural Resources is currently generating about 0.05 per unit of volatility. If you would invest 1,726 in Ivy Natural Resources on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Ivy Natural Resources or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Ivy Natural Resources
Performance |
| Timeline |
| John Hancock Financial |
| Ivy Natural Resources |
John Hancock and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Ivy Natural
The main advantage of trading using opposite John Hancock and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural'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 |
| Ivy Natural vs. Jhancock Disciplined Value | Ivy Natural vs. Dodge Cox Stock | Ivy Natural vs. American Mutual Fund | Ivy Natural vs. Guidemark Large Cap |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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