Correlation Between John Hancock and Tax Exempt
Can any of the company-specific risk be diversified away by investing in both John Hancock and Tax Exempt 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 Tax Exempt 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 Tax Exempt Bond, you can compare the effects of market volatilities on John Hancock and Tax Exempt 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 Tax Exempt. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Tax Exempt.
Diversification Opportunities for John Hancock and Tax Exempt
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Tax is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Tax Exempt Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Bond 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 Tax Exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Bond has no effect on the direction of John Hancock i.e., John Hancock and Tax Exempt go up and down completely randomly.
Pair Corralation between John Hancock and Tax Exempt
Considering the 90-day investment horizon John Hancock Financial is expected to generate 8.59 times more return on investment than Tax Exempt. However, John Hancock is 8.59 times more volatile than Tax Exempt Bond. It trades about 0.04 of its potential returns per unit of risk. Tax Exempt Bond is currently generating about 0.08 per unit of risk. If you would invest 2,867 in John Hancock Financial on September 2, 2024 and sell it today you would earn a total of 1,073 from holding John Hancock Financial or generate 37.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Tax Exempt Bond
Performance |
| Timeline |
| John Hancock Financial |
| Tax Exempt Bond |
John Hancock and Tax Exempt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Tax Exempt
The main advantage of trading using opposite John Hancock and Tax Exempt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Tax Exempt 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 Tax Exempt will offset losses from the drop in Tax Exempt'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 |
| Tax Exempt vs. Nasdaq 100 Index Fund | Tax Exempt vs. Vanguard Small Cap Growth | Tax Exempt vs. Issachar Fund Class | Tax Exempt vs. Eic Value Fund |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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