Correlation Between John Hancock and Columbia Amt
Can any of the company-specific risk be diversified away by investing in both John Hancock and Columbia Amt 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 Columbia Amt 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 Columbia Amt Free New, you can compare the effects of market volatilities on John Hancock and Columbia Amt 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 Columbia Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Columbia Amt.
Diversification Opportunities for John Hancock and Columbia Amt
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Columbia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Columbia Amt Free New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Amt Free 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 Columbia Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Amt Free has no effect on the direction of John Hancock i.e., John Hancock and Columbia Amt go up and down completely randomly.
Pair Corralation between John Hancock and Columbia Amt
Considering the 90-day investment horizon John Hancock Financial is expected to generate 8.13 times more return on investment than Columbia Amt. However, John Hancock is 8.13 times more volatile than Columbia Amt Free New. It trades about 0.22 of its potential returns per unit of risk. Columbia Amt Free New is currently generating about 0.03 per unit of risk. If you would invest 3,358 in John Hancock Financial on September 13, 2024 and sell it today you would earn a total of 497.00 from holding John Hancock Financial or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
John Hancock Financial vs. Columbia Amt Free New
Performance |
| Timeline |
| John Hancock Financial |
| Columbia Amt Free |
John Hancock and Columbia Amt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Columbia Amt
The main advantage of trading using opposite John Hancock and Columbia Amt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Columbia Amt 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 Columbia Amt will offset losses from the drop in Columbia Amt'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 |
| Columbia Amt vs. Columbia Ultra Short | Columbia Amt vs. Columbia Integrated Large | Columbia Amt vs. Columbia Integrated Large | Columbia Amt vs. Columbia Select Smaller 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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