Correlation Between GM and John Hancock
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and John 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 John Hancock Disciplined, you can compare the effects of market volatilities on GM 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 GM with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and John Hancock.
Diversification Opportunities for GM and John Hancock
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding General Motors 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 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 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 GM i.e., GM and John Hancock go up and down completely randomly.
Pair Corralation between GM and John Hancock
Allowing for the 90-day total investment horizon GM is expected to generate 1.1 times less return on investment than John Hancock. In addition to that, GM is 2.65 times more volatile than John Hancock Disciplined. It trades about 0.07 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.21 per unit of volatility. If you would invest 2,615 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 136.00 from holding John Hancock Disciplined or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. John Hancock Disciplined
Performance |
| Timeline |
| General Motors |
| John Hancock Disciplined |
GM and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and John Hancock
The main advantage of trading using opposite GM and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and John Hancock Disciplined 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.| John Hancock vs. Us Real Estate | John Hancock vs. Sterling Capital Stratton | John Hancock vs. Teachers Insurance And | John Hancock vs. Jhancock Real Estate |
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
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |