Correlation Between GlaxoSmithKline PLC and John Hancock
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC 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 GlaxoSmithKline PLC and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and John Hancock Disciplined, you can compare the effects of market volatilities on GlaxoSmithKline PLC 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 GlaxoSmithKline PLC with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and John Hancock.
Diversification Opportunities for GlaxoSmithKline PLC and John Hancock
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and John is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR 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 GlaxoSmithKline PLC 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 GlaxoSmithKline PLC ADR 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 GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and John Hancock go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and John Hancock
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 3.92 times less return on investment than John Hancock. In addition to that, GlaxoSmithKline PLC is 1.48 times more volatile than John Hancock Disciplined. It trades about 0.01 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.07 per unit of volatility. If you would invest 2,396 in John Hancock Disciplined on August 25, 2024 and sell it today you would earn a total of 799.00 from holding John Hancock Disciplined or generate 33.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. John Hancock Disciplined
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| John Hancock Disciplined |
GlaxoSmithKline PLC and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and John Hancock
The main advantage of trading using opposite GlaxoSmithKline PLC and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC 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.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| John Hancock vs. Mfs Value Fund | John Hancock vs. Mfs International Value | John Hancock vs. Metropolitan West Total | John Hancock vs. Mfs International Diversification |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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