Correlation Between ClimateRock and John Hancock
Can any of the company-specific risk be diversified away by investing in both ClimateRock 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 ClimateRock and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClimateRock Class A and John Hancock Investors, you can compare the effects of market volatilities on ClimateRock 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 ClimateRock with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClimateRock and John Hancock.
Diversification Opportunities for ClimateRock and John Hancock
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ClimateRock and John is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Class A and John Hancock Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investors and ClimateRock 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 ClimateRock Class A 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 Investors has no effect on the direction of ClimateRock i.e., ClimateRock and John Hancock go up and down completely randomly.
Pair Corralation between ClimateRock and John Hancock
Given the investment horizon of 90 days ClimateRock is expected to generate 1.99 times less return on investment than John Hancock. But when comparing it to its historical volatility, ClimateRock Class A is 6.62 times less risky than John Hancock. It trades about 0.19 of its potential returns per unit of risk. John Hancock Investors is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,406 in John Hancock Investors on August 30, 2024 and sell it today you would earn a total of 12.00 from holding John Hancock Investors or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
ClimateRock Class A vs. John Hancock Investors
Performance |
| Timeline |
| ClimateRock Class |
| John Hancock Investors |
ClimateRock and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClimateRock and John Hancock
The main advantage of trading using opposite ClimateRock and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClimateRock 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.| ClimateRock vs. AlphaVest Acquisition Corp | ClimateRock vs. Golden Star Acquisition | ClimateRock vs. Alpha One | ClimateRock vs. Manaris Corp |
| John Hancock vs. ClimateRock Class A | John Hancock vs. CF Acquisition VII | John Hancock vs. DP Cap Acquisition |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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