Correlation Between HP and John Hancock
Can any of the company-specific risk be diversified away by investing in both HP 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 HP and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and John Hancock Esg, you can compare the effects of market volatilities on HP 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 HP with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and John Hancock.
Diversification Opportunities for HP and John Hancock
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HP and John is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg and HP 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 HP Inc 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 Esg has no effect on the direction of HP i.e., HP and John Hancock go up and down completely randomly.
Pair Corralation between HP and John Hancock
Considering the 90-day investment horizon HP Inc is expected to generate 1.59 times more return on investment than John Hancock. However, HP is 1.59 times more volatile than John Hancock Esg. It trades about 0.19 of its potential returns per unit of risk. John Hancock Esg is currently generating about -0.1 per unit of risk. If you would invest 3,333 in HP Inc on November 27, 2024 and sell it today you would earn a total of 134.00 from holding HP Inc or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. John Hancock Esg
Performance |
| Timeline |
| HP Inc |
| John Hancock Esg |
HP and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and John Hancock
The main advantage of trading using opposite HP and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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 HP Inc and John Hancock Esg 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. Principal Lifetime Hybrid | John Hancock vs. Dodge Cox Stock | John Hancock vs. Guidemark Large Cap | John Hancock vs. Balanced Allocation Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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