Correlation Between John Hancock and Dreyfus Alcentra
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dreyfus Alcentra 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 Dreyfus Alcentra 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 Dreyfus Alcentra Global, you can compare the effects of market volatilities on John Hancock and Dreyfus Alcentra 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 Dreyfus Alcentra. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dreyfus Alcentra.
Diversification Opportunities for John Hancock and Dreyfus Alcentra
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Dreyfus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Dreyfus Alcentra Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Alcentra Global 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 Dreyfus Alcentra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Alcentra Global has no effect on the direction of John Hancock i.e., John Hancock and Dreyfus Alcentra go up and down completely randomly.
Pair Corralation between John Hancock and Dreyfus Alcentra
Considering the 90-day investment horizon John Hancock Financial is expected to generate 38.55 times more return on investment than Dreyfus Alcentra. However, John Hancock is 38.55 times more volatile than Dreyfus Alcentra Global. It trades about 0.37 of its potential returns per unit of risk. Dreyfus Alcentra Global is currently generating about 0.3 per unit of risk. If you would invest 3,378 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 543.00 from holding John Hancock Financial or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Dreyfus Alcentra Global
Performance |
| Timeline |
| John Hancock Financial |
| Dreyfus Alcentra Global |
John Hancock and Dreyfus Alcentra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Dreyfus Alcentra
The main advantage of trading using opposite John Hancock and Dreyfus Alcentra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dreyfus Alcentra 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 Dreyfus Alcentra will offset losses from the drop in Dreyfus Alcentra'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 |
| Dreyfus Alcentra vs. Vanguard Financials Index | Dreyfus Alcentra vs. Goldman Sachs Financial | Dreyfus Alcentra vs. Prudential Financial Services | Dreyfus Alcentra vs. John Hancock Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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