Correlation Between John Hancock and SSGA Active
Can any of the company-specific risk be diversified away by investing in both John Hancock and SSGA Active 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 SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Exchange Traded and SSGA Active Trust, you can compare the effects of market volatilities on John Hancock and SSGA Active 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 SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and SSGA Active.
Diversification Opportunities for John Hancock and SSGA Active
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and SSGA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Exchange Traded and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust 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 Traded are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of John Hancock i.e., John Hancock and SSGA Active go up and down completely randomly.
Pair Corralation between John Hancock and SSGA Active
Given the investment horizon of 90 days John Hancock is expected to generate 1.06 times less return on investment than SSGA Active. In addition to that, John Hancock is 1.74 times more volatile than SSGA Active Trust. It trades about 0.07 of its total potential returns per unit of risk. SSGA Active Trust is currently generating about 0.13 per unit of volatility. If you would invest 2,410 in SSGA Active Trust on September 3, 2024 and sell it today you would earn a total of 193.00 from holding SSGA Active Trust or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Exchange Traded vs. SSGA Active Trust
Performance |
| Timeline |
| John Hancock Exchange |
| SSGA Active Trust |
John Hancock and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and SSGA Active
The main advantage of trading using opposite John Hancock and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, SSGA Active 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 SSGA Active will offset losses from the drop in SSGA Active's long position.| John Hancock vs. Janus Henderson Mortgage Backed | John Hancock vs. John Hancock Exchange Traded | John Hancock vs. JPMorgan Short Duration | John Hancock vs. BlackRock Intermediate Muni |
| SSGA Active vs. SPDR Bloomberg Barclays | SSGA Active vs. SPDR SSGA Fixed | SSGA Active vs. SPDR DoubleLine Short | SSGA Active vs. SPDR Portfolio Corporate |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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