Correlation Between Blue Chip and John Hancock
Can any of the company-specific risk be diversified away by investing in both Blue Chip 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 Blue Chip and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Chip Growth and John Hancock International, you can compare the effects of market volatilities on Blue Chip 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 Blue Chip with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Chip and John Hancock.
Diversification Opportunities for Blue Chip and John Hancock
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blue and John is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blue Chip Growth and John Hancock International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Interna and Blue Chip 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 Blue Chip Growth 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 Interna has no effect on the direction of Blue Chip i.e., Blue Chip and John Hancock go up and down completely randomly.
Pair Corralation between Blue Chip and John Hancock
Assuming the 90 days horizon Blue Chip Growth is expected to generate 1.32 times more return on investment than John Hancock. However, Blue Chip is 1.32 times more volatile than John Hancock International. It trades about 0.12 of its potential returns per unit of risk. John Hancock International is currently generating about 0.09 per unit of risk. If you would invest 4,607 in Blue Chip Growth on September 3, 2024 and sell it today you would earn a total of 1,661 from holding Blue Chip Growth or generate 36.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Chip Growth vs. John Hancock International
Performance |
| Timeline |
| Blue Chip Growth |
| John Hancock Interna |
Blue Chip and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Chip and John Hancock
The main advantage of trading using opposite Blue Chip and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Chip 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.| Blue Chip vs. Ab Small Cap | Blue Chip vs. Touchstone Small Cap | Blue Chip vs. Us Small Cap | Blue Chip vs. Champlain Small |
| John Hancock vs. John Hancock Bond | John Hancock vs. John Hancock Disciplined | John Hancock vs. Oppenheimer Intl Small | John Hancock vs. Jpmorgan Equity Income |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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