Correlation Between John Hancock and Salient Select
Can any of the company-specific risk be diversified away by investing in both John Hancock and Salient Select 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 Salient Select 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 Salient Select Income, you can compare the effects of market volatilities on John Hancock and Salient Select 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 Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Salient Select.
Diversification Opportunities for John Hancock and Salient Select
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Salient is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Salient Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Select Income 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 Salient Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Select Income has no effect on the direction of John Hancock i.e., John Hancock and Salient Select go up and down completely randomly.
Pair Corralation between John Hancock and Salient Select
Considering the 90-day investment horizon John Hancock Financial is expected to generate 3.36 times more return on investment than Salient Select. However, John Hancock is 3.36 times more volatile than Salient Select Income. It trades about 0.05 of its potential returns per unit of risk. Salient Select Income is currently generating about 0.08 per unit of risk. If you would invest 2,756 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 1,164 from holding John Hancock Financial or generate 42.24% 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. Salient Select Income
Performance |
| Timeline |
| John Hancock Financial |
| Salient Select Income |
John Hancock and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Salient Select
The main advantage of trading using opposite John Hancock and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Salient Select 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 Salient Select will offset losses from the drop in Salient Select'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 |
| Salient Select vs. Bbh Intermediate Municipal | Salient Select vs. Ab Bond Inflation | Salient Select vs. Artisan High Income | Salient Select vs. Transamerica Funds |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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