Correlation Between John Hancock and State Farm
Can any of the company-specific risk be diversified away by investing in both John Hancock and State Farm 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 State Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Money and State Farm Balanced, you can compare the effects of market volatilities on John Hancock and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and State Farm.
Diversification Opportunities for John Hancock and State Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Money and State Farm Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Balanced 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 Money are associated (or correlated) with State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Balanced has no effect on the direction of John Hancock i.e., John Hancock and State Farm go up and down completely randomly.
Pair Corralation between John Hancock and State Farm
If you would invest 7,631 in State Farm Balanced on November 27, 2024 and sell it today you would earn a total of 1,374 from holding State Farm Balanced or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 13.79% |
| Values | Daily Returns |
John Hancock Money vs. State Farm Balanced
Performance |
| Timeline |
| John Hancock Money |
| State Farm Balanced |
John Hancock and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and State Farm
The main advantage of trading using opposite John Hancock and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm's long position.| John Hancock vs. Franklin Small Cap | John Hancock vs. Old Westbury Small | John Hancock vs. Vulcan Value Partners | John Hancock vs. Legg Mason Partners |
| State Farm vs. Ocm Mutual Fund | State Farm vs. Invesco Gold Special | State Farm vs. Global Gold Fund | State Farm vs. Gabelli Gold 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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