Correlation Between John Hancock and Transamerica Floating
Can any of the company-specific risk be diversified away by investing in both John Hancock and Transamerica Floating 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 Transamerica Floating 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 Transamerica Floating Rate, you can compare the effects of market volatilities on John Hancock and Transamerica Floating 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 Transamerica Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Transamerica Floating.
Diversification Opportunities for John Hancock and Transamerica Floating
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Transamerica is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Transamerica Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Floating 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 Transamerica Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Floating has no effect on the direction of John Hancock i.e., John Hancock and Transamerica Floating go up and down completely randomly.
Pair Corralation between John Hancock and Transamerica Floating
Considering the 90-day investment horizon John Hancock Financial is expected to generate 9.46 times more return on investment than Transamerica Floating. However, John Hancock is 9.46 times more volatile than Transamerica Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Transamerica Floating Rate is currently generating about 0.21 per unit of risk. If you would invest 2,436 in John Hancock Financial on September 12, 2024 and sell it today you would earn a total of 1,456 from holding John Hancock Financial or generate 59.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Transamerica Floating Rate
Performance |
| Timeline |
| John Hancock Financial |
| Transamerica Floating |
John Hancock and Transamerica Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Transamerica Floating
The main advantage of trading using opposite John Hancock and Transamerica Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Transamerica Floating 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 Transamerica Floating will offset losses from the drop in Transamerica Floating'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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