Correlation Between John Hancock and SCOR PK
Can any of the company-specific risk be diversified away by investing in both John Hancock and SCOR PK 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 SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Exchange and SCOR PK, you can compare the effects of market volatilities on John Hancock and SCOR PK 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 SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and SCOR PK.
Diversification Opportunities for John Hancock and SCOR PK
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and SCOR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Exchange and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 Exchange are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of John Hancock i.e., John Hancock and SCOR PK go up and down completely randomly.
Pair Corralation between John Hancock and SCOR PK
Given the investment horizon of 90 days John Hancock is expected to generate 3.91 times less return on investment than SCOR PK. But when comparing it to its historical volatility, John Hancock Exchange is 4.9 times less risky than SCOR PK. It trades about 0.36 of its potential returns per unit of risk. SCOR PK is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 210.00 in SCOR PK on September 1, 2024 and sell it today you would earn a total of 38.00 from holding SCOR PK or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
John Hancock Exchange vs. SCOR PK
Performance |
| Timeline |
| John Hancock Exchange |
| SCOR PK |
John Hancock and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and SCOR PK
The main advantage of trading using opposite John Hancock and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| John Hancock vs. iShares Core SP | John Hancock vs. iShares Core MSCI | John Hancock vs. iShares Broad USD | John Hancock vs. iShares Core SP |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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