Correlation Between John Hancock and Great Elm
Can any of the company-specific risk be diversified away by investing in both John Hancock and Great Elm 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 Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Income and Great Elm Group, you can compare the effects of market volatilities on John Hancock and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Great Elm.
Diversification Opportunities for John Hancock and Great Elm
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Great is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Great Elm Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Group 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 Income are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Group has no effect on the direction of John Hancock i.e., John Hancock and Great Elm go up and down completely randomly.
Pair Corralation between John Hancock and Great Elm
Considering the 90-day investment horizon John Hancock Income is expected to under-perform the Great Elm. But the stock apears to be less risky and, when comparing its historical volatility, John Hancock Income is 3.25 times less risky than Great Elm. The stock trades about -0.03 of its potential returns per unit of risk. The Great Elm Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Great Elm Group on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Great Elm Group or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Income vs. Great Elm Group
Performance |
| Timeline |
| John Hancock Income |
| Great Elm Group |
John Hancock and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Great Elm
The main advantage of trading using opposite John Hancock and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| John Hancock vs. PowerUp Acquisition Corp | John Hancock vs. Aurora Innovation | John Hancock vs. HUMANA INC | John Hancock vs. Aquagold International |
| Great Elm vs. PowerUp Acquisition Corp | Great Elm vs. Aurora Innovation | Great Elm vs. HUMANA INC | Great Elm vs. Aquagold International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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