Correlation Between John Hancock and Jp Morgan
Can any of the company-specific risk be diversified away by investing in both John Hancock and Jp Morgan 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 Jp Morgan 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 Jp Morgan Smartretirement, you can compare the effects of market volatilities on John Hancock and Jp Morgan 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 Jp Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Jp Morgan.
Diversification Opportunities for John Hancock and Jp Morgan
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and JTSQX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Jp Morgan Smartretirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jp Morgan Smartretirement 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 Jp Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jp Morgan Smartretirement has no effect on the direction of John Hancock i.e., John Hancock and Jp Morgan go up and down completely randomly.
Pair Corralation between John Hancock and Jp Morgan
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.43 times more return on investment than Jp Morgan. However, John Hancock is 2.43 times more volatile than Jp Morgan Smartretirement. It trades about 0.18 of its potential returns per unit of risk. Jp Morgan Smartretirement is currently generating about 0.1 per unit of risk. If you would invest 3,439 in John Hancock Financial on October 19, 2024 and sell it today you would earn a total of 204.00 from holding John Hancock Financial or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Jp Morgan Smartretirement
Performance |
| Timeline |
| John Hancock Financial |
| Jp Morgan Smartretirement |
John Hancock and Jp Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Jp Morgan
The main advantage of trading using opposite John Hancock and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Jp Morgan 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 Jp Morgan will offset losses from the drop in Jp Morgan'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 |
| Jp Morgan vs. John Hancock Financial | Jp Morgan vs. Prudential Financial Services | Jp Morgan vs. Vanguard Financials Index | Jp Morgan vs. Putnam Global Financials |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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