Correlation Between John Hancock and Jpmorgan High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Jpmorgan High 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 Jpmorgan High 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 Jpmorgan High Yield, you can compare the effects of market volatilities on John Hancock and Jpmorgan High 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 Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Jpmorgan High.
Diversification Opportunities for John Hancock and Jpmorgan High
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Jpmorgan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield 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 Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of John Hancock i.e., John Hancock and Jpmorgan High go up and down completely randomly.
Pair Corralation between John Hancock and Jpmorgan High
Considering the 90-day investment horizon John Hancock Financial is expected to generate 10.12 times more return on investment than Jpmorgan High. However, John Hancock is 10.12 times more volatile than Jpmorgan High Yield. It trades about 0.37 of its potential returns per unit of risk. Jpmorgan High Yield is currently generating about 0.18 per unit of risk. If you would invest 3,378 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 542.00 from holding John Hancock Financial or generate 16.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Jpmorgan High Yield
Performance |
| Timeline |
| John Hancock Financial |
| Jpmorgan High Yield |
John Hancock and Jpmorgan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Jpmorgan High
The main advantage of trading using opposite John Hancock and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Jpmorgan High 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 Jpmorgan High will offset losses from the drop in Jpmorgan High'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 |
| Jpmorgan High vs. Jpmorgan Smartretirement 2035 | Jpmorgan High vs. Jpmorgan Smartretirement 2035 | Jpmorgan High vs. Jpmorgan Smartretirement 2035 | Jpmorgan High vs. Jpmorgan Smartretirement 2035 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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