Correlation Between Great Elm and John Hancock
Can any of the company-specific risk be diversified away by investing in both Great Elm 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 Great Elm and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and John Hancock Investors, you can compare the effects of market volatilities on Great Elm 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 Great Elm with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and John Hancock.
Diversification Opportunities for Great Elm and John Hancock
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Great and John is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital 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 Great Elm 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 Great Elm Capital 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 Great Elm i.e., Great Elm and John Hancock go up and down completely randomly.
Pair Corralation between Great Elm and John Hancock
Given the investment horizon of 90 days Great Elm is expected to generate 47.4 times less return on investment than John Hancock. In addition to that, Great Elm is 3.88 times more volatile than John Hancock Investors. It trades about 0.0 of its total potential returns per unit of risk. John Hancock Investors is currently generating about 0.12 per unit of volatility. If you would invest 1,387 in John Hancock Investors on November 4, 2024 and sell it today you would earn a total of 13.00 from holding John Hancock Investors or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. John Hancock Investors
Performance |
| Timeline |
| Great Elm Capital |
| John Hancock Investors |
Great Elm and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and John Hancock
The main advantage of trading using opposite Great Elm and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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.| Great Elm vs. John Hancock Investors | Great Elm vs. MFS Charter Income | Great Elm vs. GCM Grosvenor | Great Elm vs. BlackRock ESG Capital |
| John Hancock vs. DTF Tax Free | John Hancock vs. MFS Investment Grade | John Hancock vs. Eaton Vance National | John Hancock vs. Nuveen California Select |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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