Correlation Between John Hancock and Aqr Large
Can any of the company-specific risk be diversified away by investing in both John Hancock and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on John Hancock and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Aqr Large.
Diversification Opportunities for John Hancock and Aqr Large
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Aqr is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of John Hancock i.e., John Hancock and Aqr Large go up and down completely randomly.
Pair Corralation between John Hancock and Aqr Large
Considering the 90-day investment horizon John Hancock Financial is expected to generate 0.99 times more return on investment than Aqr Large. However, John Hancock Financial is 1.01 times less risky than Aqr Large. It trades about 0.09 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.05 per unit of risk. If you would invest 2,449 in John Hancock Financial on October 1, 2024 and sell it today you would earn a total of 1,108 from holding John Hancock Financial or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Aqr Large Cap
Performance |
| Timeline |
| John Hancock Financial |
| Aqr Large Cap |
John Hancock and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Aqr Large
The main advantage of trading using opposite John Hancock and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large'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 |
| Aqr Large vs. Qs Moderate Growth | Aqr Large vs. Pro Blend Moderate Term | Aqr Large vs. Jp Morgan Smartretirement | Aqr Large vs. Fidelity Managed Retirement |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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