Correlation Between John Hancock and Spirit Of
Can any of the company-specific risk be diversified away by investing in both John Hancock and Spirit Of 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 Spirit Of 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 Spirit Of America, you can compare the effects of market volatilities on John Hancock and Spirit Of 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 Spirit Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Spirit Of.
Diversification Opportunities for John Hancock and Spirit Of
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Spirit is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America 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 Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of John Hancock i.e., John Hancock and Spirit Of go up and down completely randomly.
Pair Corralation between John Hancock and Spirit Of
Considering the 90-day investment horizon John Hancock Financial is expected to generate 0.26 times more return on investment than Spirit Of. However, John Hancock Financial is 3.78 times less risky than Spirit Of. It trades about 0.18 of its potential returns per unit of risk. Spirit Of America is currently generating about -0.22 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
John Hancock Financial vs. Spirit Of America
Performance |
| Timeline |
| John Hancock Financial |
| Spirit Of America |
John Hancock and Spirit Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Spirit Of
The main advantage of trading using opposite John Hancock and Spirit Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Spirit Of 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 Spirit Of will offset losses from the drop in Spirit Of'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 |
| Spirit Of vs. Vanguard Financials Index | Spirit Of vs. Royce Global Financial | Spirit Of vs. John Hancock Financial | Spirit Of 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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