Correlation Between GM and J Hancock
Can any of the company-specific risk be diversified away by investing in both GM and J 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 GM and J Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and J Hancock Ii, you can compare the effects of market volatilities on GM and J 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 GM with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and J Hancock.
Diversification Opportunities for GM and J Hancock
Significant diversification
The 3 months correlation between GM and JROUX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and GM 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 General Motors are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of GM i.e., GM and J Hancock go up and down completely randomly.
Pair Corralation between GM and J Hancock
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the J Hancock. In addition to that, GM is 3.56 times more volatile than J Hancock Ii. It trades about -0.3 of its total potential returns per unit of risk. J Hancock Ii is currently generating about -0.05 per unit of volatility. If you would invest 1,418 in J Hancock Ii on November 25, 2024 and sell it today you would lose (10.00) from holding J Hancock Ii or give up 0.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
General Motors vs. J Hancock Ii
Performance |
Timeline |
General Motors |
J Hancock Ii |
GM and J Hancock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and J Hancock
The main advantage of trading using opposite GM and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, J 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 J Hancock will offset losses from the drop in J Hancock's long position.The idea behind General Motors and J Hancock Ii pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.J Hancock vs. Small Pany Growth | ||
J Hancock vs. Barings Emerging Markets | ||
J Hancock vs. Fbanjx | ||
J Hancock vs. Rbb Fund |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |