Correlation Between John Hancock and Wisdomtree Digital
Can any of the company-specific risk be diversified away by investing in both John Hancock and Wisdomtree Digital 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 Wisdomtree Digital 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 Wisdomtree Digital Trust, you can compare the effects of market volatilities on John Hancock and Wisdomtree Digital 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 Wisdomtree Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Wisdomtree Digital.
Diversification Opportunities for John Hancock and Wisdomtree Digital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Wisdomtree is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Wisdomtree Digital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Digital Trust 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 Wisdomtree Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Digital Trust has no effect on the direction of John Hancock i.e., John Hancock and Wisdomtree Digital go up and down completely randomly.
Pair Corralation between John Hancock and Wisdomtree Digital
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.76 times more return on investment than Wisdomtree Digital. However, John Hancock is 1.76 times more volatile than Wisdomtree Digital Trust. It trades about 0.07 of its potential returns per unit of risk. Wisdomtree Digital Trust is currently generating about 0.07 per unit of risk. If you would invest 3,223 in John Hancock Financial on November 28, 2024 and sell it today you would earn a total of 347.00 from holding John Hancock Financial or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.18% |
| Values | Daily Returns |
John Hancock Financial vs. Wisdomtree Digital Trust
Performance |
| Timeline |
| John Hancock Financial |
| Wisdomtree Digital Trust |
John Hancock and Wisdomtree Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Wisdomtree Digital
The main advantage of trading using opposite John Hancock and Wisdomtree Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Wisdomtree Digital 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 Wisdomtree Digital will offset losses from the drop in Wisdomtree Digital'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 |
| Wisdomtree Digital vs. Pace International Emerging | Wisdomtree Digital vs. Rbc Emerging Markets | Wisdomtree Digital vs. Jpmorgan Emerging Markets | Wisdomtree Digital vs. The Hartford Emerging |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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