Correlation Between John Hancock and Rational/pier
Can any of the company-specific risk be diversified away by investing in both John Hancock and Rational/pier 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 Rational/pier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Bond and Rationalpier 88 Convertible, you can compare the effects of market volatilities on John Hancock and Rational/pier 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 Rational/pier. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Rational/pier.
Diversification Opportunities for John Hancock and Rational/pier
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and Rational/pier is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Rationalpier 88 Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rationalpier 88 Conv 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 Bond are associated (or correlated) with Rational/pier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rationalpier 88 Conv has no effect on the direction of John Hancock i.e., John Hancock and Rational/pier go up and down completely randomly.
Pair Corralation between John Hancock and Rational/pier
Assuming the 90 days horizon John Hancock is expected to generate 1.62 times less return on investment than Rational/pier. But when comparing it to its historical volatility, John Hancock Bond is 1.03 times less risky than Rational/pier. It trades about 0.11 of its potential returns per unit of risk. Rationalpier 88 Convertible is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 982.00 in Rationalpier 88 Convertible on September 1, 2024 and sell it today you would earn a total of 185.00 from holding Rationalpier 88 Convertible or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Bond vs. Rationalpier 88 Convertible
Performance |
| Timeline |
| John Hancock Bond |
| Rationalpier 88 Conv |
John Hancock and Rational/pier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Rational/pier
The main advantage of trading using opposite John Hancock and Rational/pier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Rational/pier 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 Rational/pier will offset losses from the drop in Rational/pier's long position.| John Hancock vs. Ep Emerging Markets | John Hancock vs. Growth Strategy Fund | John Hancock vs. Ashmore Emerging Markets | John Hancock vs. Origin Emerging Markets |
| Rational/pier vs. Blackrock Financial Institutions | Rational/pier vs. Royce Global Financial | Rational/pier vs. Goldman Sachs Financial | Rational/pier vs. Prudential Jennison Financial |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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