Correlation Between John Hancock and Emerald Insights
Can any of the company-specific risk be diversified away by investing in both John Hancock and Emerald Insights 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 Emerald Insights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Variable and Emerald Insights Fund, you can compare the effects of market volatilities on John Hancock and Emerald Insights 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 Emerald Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Emerald Insights.
Diversification Opportunities for John Hancock and Emerald Insights
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Emerald is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Variable and Emerald Insights Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Insights 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 Variable are associated (or correlated) with Emerald Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Insights has no effect on the direction of John Hancock i.e., John Hancock and Emerald Insights go up and down completely randomly.
Pair Corralation between John Hancock and Emerald Insights
Assuming the 90 days horizon John Hancock is expected to generate 1.2 times less return on investment than Emerald Insights. But when comparing it to its historical volatility, John Hancock Variable is 1.09 times less risky than Emerald Insights. It trades about 0.11 of its potential returns per unit of risk. Emerald Insights Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,497 in Emerald Insights Fund on September 1, 2024 and sell it today you would earn a total of 642.00 from holding Emerald Insights Fund or generate 42.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
John Hancock Variable vs. Emerald Insights Fund
Performance |
| Timeline |
| John Hancock Variable |
| Emerald Insights |
John Hancock and Emerald Insights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Emerald Insights
The main advantage of trading using opposite John Hancock and Emerald Insights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Emerald Insights 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 Emerald Insights will offset losses from the drop in Emerald Insights' long position.| John Hancock vs. Pace Municipal Fixed | John Hancock vs. T Rowe Price | John Hancock vs. Old Westbury Municipal | John Hancock vs. T Rowe Price |
| Emerald Insights vs. Emerald Banking And | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Insights 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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