Correlation Between John Hancock and Sgi Peak
Can any of the company-specific risk be diversified away by investing in both John Hancock and Sgi Peak 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 Sgi Peak 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 Sgi Peak Growth, you can compare the effects of market volatilities on John Hancock and Sgi Peak 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 Sgi Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Sgi Peak.
Diversification Opportunities for John Hancock and Sgi Peak
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Sgi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Sgi Peak Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sgi Peak Growth 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 Sgi Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sgi Peak Growth has no effect on the direction of John Hancock i.e., John Hancock and Sgi Peak go up and down completely randomly.
Pair Corralation between John Hancock and Sgi Peak
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.73 times more return on investment than Sgi Peak. However, John Hancock is 2.73 times more volatile than Sgi Peak Growth. It trades about 0.05 of its potential returns per unit of risk. Sgi Peak Growth is currently generating about 0.07 per unit of risk. If you would invest 2,756 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 1,165 from holding John Hancock Financial or generate 42.27% 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. Sgi Peak Growth
Performance |
| Timeline |
| John Hancock Financial |
| Sgi Peak Growth |
John Hancock and Sgi Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Sgi Peak
The main advantage of trading using opposite John Hancock and Sgi Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Sgi Peak 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 Sgi Peak will offset losses from the drop in Sgi Peak'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 |
| Sgi Peak vs. John Hancock Financial | Sgi Peak vs. Prudential Financial Services | Sgi Peak vs. Angel Oak Financial | Sgi Peak 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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