Correlation Between John Hancock and Flaherty
Can any of the company-specific risk be diversified away by investing in both John Hancock and Flaherty 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 Flaherty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Tax and Flaherty and Crumrine, you can compare the effects of market volatilities on John Hancock and Flaherty 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 Flaherty. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Flaherty.
Diversification Opportunities for John Hancock and Flaherty
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Flaherty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax and Flaherty and Crumrine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty and Crumrine 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 Tax are associated (or correlated) with Flaherty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty and Crumrine has no effect on the direction of John Hancock i.e., John Hancock and Flaherty go up and down completely randomly.
Pair Corralation between John Hancock and Flaherty
Considering the 90-day investment horizon John Hancock Tax is expected to generate 1.68 times more return on investment than Flaherty. However, John Hancock is 1.68 times more volatile than Flaherty and Crumrine. It trades about 0.28 of its potential returns per unit of risk. Flaherty and Crumrine is currently generating about 0.24 per unit of risk. If you would invest 2,205 in John Hancock Tax on November 9, 2024 and sell it today you would earn a total of 113.00 from holding John Hancock Tax or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Tax vs. Flaherty and Crumrine
Performance |
| Timeline |
| John Hancock Tax |
| Flaherty and Crumrine |
John Hancock and Flaherty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Flaherty
The main advantage of trading using opposite John Hancock and Flaherty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Flaherty 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 Flaherty will offset losses from the drop in Flaherty's long position.| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. Pimco Corporate Income |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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