Correlation Between John Hancock and Leader Short-term
Can any of the company-specific risk be diversified away by investing in both John Hancock and Leader Short-term 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 Leader Short-term 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 Leader Short Term Bond, you can compare the effects of market volatilities on John Hancock and Leader Short-term 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 Leader Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Leader Short-term.
Diversification Opportunities for John Hancock and Leader Short-term
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Leader is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Leader Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Short Term 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 Leader Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Short Term has no effect on the direction of John Hancock i.e., John Hancock and Leader Short-term go up and down completely randomly.
Pair Corralation between John Hancock and Leader Short-term
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Leader Short-term. In addition to that, John Hancock is 7.52 times more volatile than Leader Short Term Bond. It trades about -0.31 of its total potential returns per unit of risk. Leader Short Term Bond is currently generating about -0.11 per unit of volatility. If you would invest 830.00 in Leader Short Term Bond on October 13, 2024 and sell it today you would lose (4.00) from holding Leader Short Term Bond or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Leader Short Term Bond
Performance |
| Timeline |
| John Hancock Financial |
| Leader Short Term |
John Hancock and Leader Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Leader Short-term
The main advantage of trading using opposite John Hancock and Leader Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Leader Short-term 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 Leader Short-term will offset losses from the drop in Leader Short-term'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 |
| Leader Short-term vs. John Hancock Financial | Leader Short-term vs. Blackstone Secured Lending | Leader Short-term vs. Goldman Sachs Financial | Leader Short-term vs. Rmb Mendon Financial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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