Correlation Between John Hancock and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both John Hancock and Meridian Equity 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 Meridian Equity 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 Meridian Equity Income, you can compare the effects of market volatilities on John Hancock and Meridian Equity 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 Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Meridian Equity.
Diversification Opportunities for John Hancock and Meridian Equity
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Meridian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity 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 Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of John Hancock i.e., John Hancock and Meridian Equity go up and down completely randomly.
Pair Corralation between John Hancock and Meridian Equity
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.68 times more return on investment than Meridian Equity. However, John Hancock is 1.68 times more volatile than Meridian Equity Income. It trades about 0.18 of its potential returns per unit of risk. Meridian Equity Income is currently generating about 0.0 per unit of risk. If you would invest 3,785 in John Hancock Financial on September 12, 2024 and sell it today you would earn a total of 107.00 from holding John Hancock Financial or generate 2.83% 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. Meridian Equity Income
Performance |
| Timeline |
| John Hancock Financial |
| Meridian Equity Income |
John Hancock and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Meridian Equity
The main advantage of trading using opposite John Hancock and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity'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 |
| Meridian Equity vs. Franklin Adjustable Government | Meridian Equity vs. Virtus Seix Government | Meridian Equity vs. Goldman Sachs Government | Meridian Equity vs. Long Term Government Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |