Correlation Between John Hancock and Scharf Balanced
Can any of the company-specific risk be diversified away by investing in both John Hancock and Scharf Balanced 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 Scharf Balanced 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 Scharf Balanced Opportunity, you can compare the effects of market volatilities on John Hancock and Scharf Balanced 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 Scharf Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Scharf Balanced.
Diversification Opportunities for John Hancock and Scharf Balanced
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Scharf is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Scharf Balanced Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Balanced Oppo 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 Scharf Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Balanced Oppo has no effect on the direction of John Hancock i.e., John Hancock and Scharf Balanced go up and down completely randomly.
Pair Corralation between John Hancock and Scharf Balanced
Considering the 90-day investment horizon John Hancock Financial is expected to generate 3.52 times more return on investment than Scharf Balanced. However, John Hancock is 3.52 times more volatile than Scharf Balanced Opportunity. It trades about 0.1 of its potential returns per unit of risk. Scharf Balanced Opportunity is currently generating about 0.14 per unit of risk. If you would invest 2,746 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 1,175 from holding John Hancock Financial or generate 42.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Scharf Balanced Opportunity
Performance |
| Timeline |
| John Hancock Financial |
| Scharf Balanced Oppo |
John Hancock and Scharf Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Scharf Balanced
The main advantage of trading using opposite John Hancock and Scharf Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Scharf Balanced 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 Scharf Balanced will offset losses from the drop in Scharf Balanced'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 |
| Scharf Balanced vs. Mesirow Financial Small | Scharf Balanced vs. John Hancock Financial | Scharf Balanced vs. Prudential Jennison Financial | Scharf Balanced vs. Financials Ultrasector Profund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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