Correlation Between John Hancock and Rmb Small
Can any of the company-specific risk be diversified away by investing in both John Hancock and Rmb Small 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 Rmb Small 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 Rmb Small Cap, you can compare the effects of market volatilities on John Hancock and Rmb Small 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 Rmb Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Rmb Small.
Diversification Opportunities for John Hancock and Rmb Small
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Rmb is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Rmb Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Small 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 Rmb Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Small Cap has no effect on the direction of John Hancock i.e., John Hancock and Rmb Small go up and down completely randomly.
Pair Corralation between John Hancock and Rmb Small
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.41 times more return on investment than Rmb Small. However, John Hancock is 1.41 times more volatile than Rmb Small Cap. It trades about 0.12 of its potential returns per unit of risk. Rmb Small Cap is currently generating about 0.03 per unit of risk. If you would invest 3,353 in John Hancock Financial on November 1, 2024 and sell it today you would earn a total of 415.00 from holding John Hancock Financial or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Rmb Small Cap
Performance |
| Timeline |
| John Hancock Financial |
| Rmb Small Cap |
John Hancock and Rmb Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Rmb Small
The main advantage of trading using opposite John Hancock and Rmb Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Rmb Small 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 Rmb Small will offset losses from the drop in Rmb Small'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 |
| Rmb Small vs. T Rowe Price | Rmb Small vs. John Hancock Financial | Rmb Small vs. Fidelity Advisor Financial | Rmb Small vs. Gabelli Global 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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