Correlation Between John Hancock and Burney Factor
Can any of the company-specific risk be diversified away by investing in both John Hancock and Burney Factor 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 Burney Factor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Multifactor and Burney Factor Rotation, you can compare the effects of market volatilities on John Hancock and Burney Factor 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 Burney Factor. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Burney Factor.
Diversification Opportunities for John Hancock and Burney Factor
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Burney is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and Burney Factor Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burney Factor Rotation 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 Multifactor are associated (or correlated) with Burney Factor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burney Factor Rotation has no effect on the direction of John Hancock i.e., John Hancock and Burney Factor go up and down completely randomly.
Pair Corralation between John Hancock and Burney Factor
Given the investment horizon of 90 days John Hancock is expected to generate 1.01 times less return on investment than Burney Factor. But when comparing it to its historical volatility, John Hancock Multifactor is 1.06 times less risky than Burney Factor. It trades about 0.33 of its potential returns per unit of risk. Burney Factor Rotation is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,031 in Burney Factor Rotation on August 28, 2024 and sell it today you would earn a total of 287.00 from holding Burney Factor Rotation or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Multifactor vs. Burney Factor Rotation
Performance |
| Timeline |
| John Hancock Multifactor |
| Burney Factor Rotation |
John Hancock and Burney Factor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Burney Factor
The main advantage of trading using opposite John Hancock and Burney Factor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Burney Factor 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 Burney Factor will offset losses from the drop in Burney Factor's long position.| John Hancock vs. Vanguard Mid Cap Index | John Hancock vs. iShares Core SP | John Hancock vs. SPDR SP MIDCAP | John Hancock vs. First Trust Dorsey |
| Burney Factor vs. Invesco BulletShares 2030 | Burney Factor vs. Invesco BulletShares 2025 | Burney Factor vs. Invesco BulletShares 2024 |
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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