Correlation Between First Trust and John Hancock
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Value and John Hancock Exchange, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and John Hancock.
Diversification Opportunities for First Trust and John Hancock
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and John is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Value and John Hancock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and First Trust 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 First Trust Value 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 Exchange has no effect on the direction of First Trust i.e., First Trust and John Hancock go up and down completely randomly.
Pair Corralation between First Trust and John Hancock
Considering the 90-day investment horizon First Trust Value is expected to generate 0.99 times more return on investment than John Hancock. However, First Trust Value is 1.01 times less risky than John Hancock. It trades about 0.25 of its potential returns per unit of risk. John Hancock Exchange is currently generating about 0.16 per unit of risk. If you would invest 4,497 in First Trust Value on August 30, 2024 and sell it today you would earn a total of 161.00 from holding First Trust Value or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Value vs. John Hancock Exchange
Performance |
| Timeline |
| First Trust Value |
| John Hancock Exchange |
First Trust and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and John Hancock
The main advantage of trading using opposite First Trust and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. First Trust Morningstar | First Trust vs. First Trust Rising | First Trust vs. First Trust Capital | First Trust vs. WisdomTree LargeCap Dividend |
| John Hancock vs. iShares MSCI USA | John Hancock vs. ABIVAX Socit Anonyme | John Hancock vs. HUMANA INC | John Hancock vs. SCOR PK |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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