Correlation Between Barings Active and John Hancock
Can any of the company-specific risk be diversified away by investing in both Barings Active and John Hancock 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 Barings Active and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and John Hancock Disciplined, you can compare the effects of market volatilities on Barings Active and John Hancock 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 Barings Active with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and John Hancock.
Diversification Opportunities for Barings Active and John Hancock
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and John is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Barings Active 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 Barings Active Short are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Disciplined has no effect on the direction of Barings Active i.e., Barings Active and John Hancock go up and down completely randomly.
Pair Corralation between Barings Active and John Hancock
Assuming the 90 days horizon Barings Active is expected to generate 3.12 times less return on investment than John Hancock. But when comparing it to its historical volatility, Barings Active Short is 6.64 times less risky than John Hancock. It trades about 0.23 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,569 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 296.00 from holding John Hancock Disciplined or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. John Hancock Disciplined
Performance |
| Timeline |
| Barings Active Short |
| John Hancock Disciplined |
Barings Active and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and John Hancock
The main advantage of trading using opposite Barings Active and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| John Hancock vs. Artisan Global Unconstrained | John Hancock vs. Morgan Stanley Global | John Hancock vs. Wisdomtree Siegel Global | John Hancock vs. Power Global Tactical |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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