Correlation Between IShares 25 and John Hancock
Can any of the company-specific risk be diversified away by investing in both IShares 25 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 IShares 25 and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 25 Year and John Hancock Exchange Traded, you can compare the effects of market volatilities on IShares 25 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 IShares 25 with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 25 and John Hancock.
Diversification Opportunities for IShares 25 and John Hancock
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares 25 Year and John Hancock Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and IShares 25 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 iShares 25 Year 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 IShares 25 i.e., IShares 25 and John Hancock go up and down completely randomly.
Pair Corralation between IShares 25 and John Hancock
Given the investment horizon of 90 days iShares 25 Year is expected to generate 3.52 times more return on investment than John Hancock. However, IShares 25 is 3.52 times more volatile than John Hancock Exchange Traded. It trades about 0.33 of its potential returns per unit of risk. John Hancock Exchange Traded is currently generating about 0.34 per unit of risk. If you would invest 951.00 in iShares 25 Year on November 9, 2024 and sell it today you would earn a total of 72.00 from holding iShares 25 Year or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares 25 Year vs. John Hancock Exchange Traded
Performance |
| Timeline |
| iShares 25 Year |
| John Hancock Exchange |
IShares 25 and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 25 and John Hancock
The main advantage of trading using opposite IShares 25 and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 25 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.| IShares 25 vs. iShares Treasury Floating | IShares 25 vs. Schwab Long Term Treasury | IShares 25 vs. iShares iBonds Dec | IShares 25 vs. iShares iBonds Dec |
| John Hancock vs. John Hancock Exchange Traded | John Hancock vs. BlackRock Intermediate Muni | John Hancock vs. JPMorgan Short Duration | John Hancock vs. iShares BBB Rated |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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