Correlation Between John Hancock and Blackrock Equity
Can any of the company-specific risk be diversified away by investing in both John Hancock and Blackrock Equity 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 Equity 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 Equity Dividend, you can compare the effects of market volatilities on John Hancock and Blackrock Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Blackrock Equity.
Diversification Opportunities for John Hancock and Blackrock Equity
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Blackrock is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Blackrock Equity Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Equity Dividend 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Equity Dividend has no effect on the direction of John Hancock i.e., John Hancock and Blackrock Equity go up and down completely randomly.
Pair Corralation between John Hancock and Blackrock Equity
Assuming the 90 days horizon John Hancock is expected to generate 1.14 times less return on investment than Blackrock Equity. But when comparing it to its historical volatility, John Hancock Funds is 1.7 times less risky than Blackrock Equity. It trades about 0.09 of its potential returns per unit of risk. Blackrock Equity Dividend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,604 in Blackrock Equity Dividend on September 12, 2024 and sell it today you would earn a total of 375.00 from holding Blackrock Equity Dividend or generate 23.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Funds vs. Blackrock Equity Dividend
Performance |
| Timeline |
| John Hancock Funds |
| Blackrock Equity Dividend |
John Hancock and Blackrock Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Blackrock Equity
The main advantage of trading using opposite John Hancock and Blackrock Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Blackrock Equity 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 Equity will offset losses from the drop in Blackrock Equity's long position.| John Hancock vs. Champlain Small | John Hancock vs. Guidemark Smallmid Cap | John Hancock vs. Kinetics Small Cap | John Hancock vs. Mutual Of America |
| Blackrock Equity vs. Vanguard Value Index | Blackrock Equity vs. Dodge Cox Stock | Blackrock Equity vs. American Mutual Fund | Blackrock Equity vs. American Funds American |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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