Correlation Between Alphabet and John Hancock
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and John Hancock Exchange, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and John Hancock.
Diversification Opportunities for Alphabet and John Hancock
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and John is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and John Hancock go up and down completely randomly.
Pair Corralation between Alphabet and John Hancock
Given the investment horizon of 90 days Alphabet is expected to generate 10.73 times less return on investment than John Hancock. In addition to that, Alphabet is 2.97 times more volatile than John Hancock Exchange. It trades about 0.01 of its total potential returns per unit of risk. John Hancock Exchange is currently generating about 0.16 per unit of volatility. If you would invest 3,678 in John Hancock Exchange on August 30, 2024 and sell it today you would earn a total of 87.00 from holding John Hancock Exchange or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. John Hancock Exchange
Performance |
| Timeline |
| Alphabet Class C |
| John Hancock Exchange |
Alphabet and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and John Hancock
The main advantage of trading using opposite Alphabet and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C and John Hancock Exchange 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. 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |