Correlation Between John Hancock and Macquariefirst
Can any of the company-specific risk be diversified away by investing in both John Hancock and Macquariefirst 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 John Hancock and Macquariefirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Preferred and Macquariefirst Tr Global, you can compare the effects of market volatilities on John Hancock and Macquariefirst 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 John Hancock with a short position of Macquariefirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Macquariefirst.
Diversification Opportunities for John Hancock and Macquariefirst
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Macquariefirst is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global and John Hancock 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 John Hancock Preferred are associated (or correlated) with Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of John Hancock i.e., John Hancock and Macquariefirst go up and down completely randomly.
Pair Corralation between John Hancock and Macquariefirst
Considering the 90-day investment horizon John Hancock Preferred is expected to generate 1.03 times more return on investment than Macquariefirst. However, John Hancock is 1.03 times more volatile than Macquariefirst Tr Global. It trades about 0.09 of its potential returns per unit of risk. Macquariefirst Tr Global is currently generating about 0.07 per unit of risk. If you would invest 1,316 in John Hancock Preferred on August 31, 2024 and sell it today you would earn a total of 449.00 from holding John Hancock Preferred or generate 34.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.9% |
| Values | Daily Returns |
John Hancock Preferred vs. Macquariefirst Tr Global
Performance |
| Timeline |
| John Hancock Preferred |
| Macquariefirst Tr Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
John Hancock and Macquariefirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Macquariefirst
The main advantage of trading using opposite John Hancock and Macquariefirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Macquariefirst 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 Macquariefirst will offset losses from the drop in Macquariefirst's long position.| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. John Hancock Tax |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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