Correlation Between J Hancock and Dow Jones
Can any of the company-specific risk be diversified away by investing in both J Hancock and Dow Jones 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 J Hancock and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Hancock Ii and Dow Jones Industrial, you can compare the effects of market volatilities on J Hancock and Dow Jones 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 J Hancock with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Hancock and Dow Jones.
Diversification Opportunities for J Hancock and Dow Jones
Poor diversification
The 3 months correlation between JGHTX and Dow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding J Hancock Ii and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and J 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 J Hancock Ii are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of J Hancock i.e., J Hancock and Dow Jones go up and down completely randomly.
Pair Corralation between J Hancock and Dow Jones
Assuming the 90 days horizon J Hancock Ii is expected to generate 1.05 times more return on investment than Dow Jones. However, J Hancock is 1.05 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 1,178 in J Hancock Ii on November 9, 2024 and sell it today you would earn a total of 244.00 from holding J Hancock Ii or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
J Hancock Ii vs. Dow Jones Industrial
Performance |
| Timeline |
J Hancock and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
J Hancock Ii
Pair trading matchups for J Hancock
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with J Hancock and Dow Jones
The main advantage of trading using opposite J Hancock and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Hancock position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| J Hancock vs. Franklin Moderate Allocation | J Hancock vs. Pnc Balanced Allocation | J Hancock vs. Calvert Moderate Allocation | J Hancock vs. Alternative Asset Allocation |
| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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