Correlation Between Nationwide Investor and John Hancock
Can any of the company-specific risk be diversified away by investing in both Nationwide Investor 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 Nationwide Investor and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Investor Destinations and John Hancock Financial, you can compare the effects of market volatilities on Nationwide Investor 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 Nationwide Investor with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Investor and John Hancock.
Diversification Opportunities for Nationwide Investor and John Hancock
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nationwide and John is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Investor Destinatio and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Nationwide Investor 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 Nationwide Investor Destinations 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 Financial has no effect on the direction of Nationwide Investor i.e., Nationwide Investor and John Hancock go up and down completely randomly.
Pair Corralation between Nationwide Investor and John Hancock
Assuming the 90 days horizon Nationwide Investor is expected to generate 2.11 times less return on investment than John Hancock. But when comparing it to its historical volatility, Nationwide Investor Destinations is 2.57 times less risky than John Hancock. It trades about 0.1 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,487 in John Hancock Financial on September 2, 2024 and sell it today you would earn a total of 1,453 from holding John Hancock Financial or generate 58.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Investor Destinatio vs. John Hancock Financial
Performance |
| Timeline |
| Nationwide Investor |
| John Hancock Financial |
Nationwide Investor and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Investor and John Hancock
The main advantage of trading using opposite Nationwide Investor and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Investor 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.| Nationwide Investor vs. Dana Large Cap | Nationwide Investor vs. Fidelity Series 1000 | Nationwide Investor vs. Large Cap Growth Profund | Nationwide Investor vs. Transamerica Large Cap |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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