Correlation Between John Hancock and Blackrock Advantage
Can any of the company-specific risk be diversified away by investing in both John Hancock and Blackrock Advantage 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 Blackrock Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Funds and Blackrock Advantage Large, you can compare the effects of market volatilities on John Hancock and Blackrock Advantage 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 Blackrock Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Blackrock Advantage.
Diversification Opportunities for John Hancock and Blackrock Advantage
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Blackrock is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Blackrock Advantage Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Advantage Large 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 Funds are associated (or correlated) with Blackrock Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Advantage Large has no effect on the direction of John Hancock i.e., John Hancock and Blackrock Advantage go up and down completely randomly.
Pair Corralation between John Hancock and Blackrock Advantage
Assuming the 90 days horizon John Hancock is expected to generate 1.97 times less return on investment than Blackrock Advantage. But when comparing it to its historical volatility, John Hancock Funds is 3.07 times less risky than Blackrock Advantage. It trades about 0.13 of its potential returns per unit of risk. Blackrock Advantage Large is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,115 in Blackrock Advantage Large on September 4, 2024 and sell it today you would earn a total of 557.00 from holding Blackrock Advantage Large or generate 26.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
John Hancock Funds vs. Blackrock Advantage Large
Performance |
| Timeline |
| John Hancock Funds |
| Blackrock Advantage Large |
John Hancock and Blackrock Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Blackrock Advantage
The main advantage of trading using opposite John Hancock and Blackrock Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Blackrock Advantage 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 Blackrock Advantage will offset losses from the drop in Blackrock Advantage's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
| Blackrock Advantage vs. Blackrock California Municipal | Blackrock Advantage vs. Blackrock Balanced Capital | Blackrock Advantage vs. Blackrock Eurofund Class | Blackrock Advantage vs. Blackrock Funds |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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