Correlation Between John Hancock and Energy Basic
Can any of the company-specific risk be diversified away by investing in both John Hancock and Energy Basic 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 Energy Basic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Government and Energy Basic Materials, you can compare the effects of market volatilities on John Hancock and Energy Basic 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 Energy Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Energy Basic.
Diversification Opportunities for John Hancock and Energy Basic
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between John and Energy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Energy Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Basic Materials 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 Government are associated (or correlated) with Energy Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Basic Materials has no effect on the direction of John Hancock i.e., John Hancock and Energy Basic go up and down completely randomly.
Pair Corralation between John Hancock and Energy Basic
Assuming the 90 days horizon John Hancock is expected to generate 3.46 times less return on investment than Energy Basic. But when comparing it to its historical volatility, John Hancock Government is 2.17 times less risky than Energy Basic. It trades about 0.06 of its potential returns per unit of risk. Energy Basic Materials is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Energy Basic Materials on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Energy Basic Materials or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Energy Basic Materials
Performance |
| Timeline |
| John Hancock Government |
| Energy Basic Materials |
John Hancock and Energy Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Energy Basic
The main advantage of trading using opposite John Hancock and Energy Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Energy Basic 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 Energy Basic will offset losses from the drop in Energy Basic's long position.| John Hancock vs. Us Global Investors | John Hancock vs. T Rowe Price | John Hancock vs. Ab Global Bond | John Hancock vs. Barings Global Floating |
| Energy Basic vs. Volumetric Fund Volumetric | Energy Basic vs. Versatile Bond Portfolio | Energy Basic vs. Growth Fund Of | Energy Basic vs. Qs Growth 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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