Correlation Between Gabelli Focus and John Hancock
Can any of the company-specific risk be diversified away by investing in both Gabelli Focus 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 Gabelli Focus and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Focus and John Hancock Financial, you can compare the effects of market volatilities on Gabelli Focus 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 Gabelli Focus with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Focus and John Hancock.
Diversification Opportunities for Gabelli Focus and John Hancock
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and John is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Focus 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 Gabelli Focus 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 The Gabelli Focus 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 Gabelli Focus i.e., Gabelli Focus and John Hancock go up and down completely randomly.
Pair Corralation between Gabelli Focus and John Hancock
Assuming the 90 days horizon The Gabelli Focus is expected to generate 0.61 times more return on investment than John Hancock. However, The Gabelli Focus is 1.63 times less risky than John Hancock. It trades about 0.47 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.09 per unit of risk. If you would invest 1,854 in The Gabelli Focus on September 13, 2024 and sell it today you would earn a total of 89.00 from holding The Gabelli Focus or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Focus vs. John Hancock Financial
Performance |
| Timeline |
| Gabelli Focus |
| John Hancock Financial |
Gabelli Focus and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Focus and John Hancock
The main advantage of trading using opposite Gabelli Focus and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Focus 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.| Gabelli Focus vs. Aqr Long Short Equity | Gabelli Focus vs. Alpine Ultra Short | Gabelli Focus vs. Virtus Multi Sector Short | Gabelli Focus vs. Touchstone Ultra Short |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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