Correlation Between John Hancock and Gabelli Healthcare
Can any of the company-specific risk be diversified away by investing in both John Hancock and Gabelli Healthcare 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 Gabelli Healthcare 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 Gabelli Healthcare WellnessRx, you can compare the effects of market volatilities on John Hancock and Gabelli Healthcare 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 Gabelli Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Gabelli Healthcare.
Diversification Opportunities for John Hancock and Gabelli Healthcare
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Gabelli is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Gabelli Healthcare WellnessRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Healthcare 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 Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Healthcare has no effect on the direction of John Hancock i.e., John Hancock and Gabelli Healthcare go up and down completely randomly.
Pair Corralation between John Hancock and Gabelli Healthcare
Considering the 90-day investment horizon John Hancock Income is expected to generate 0.53 times more return on investment than Gabelli Healthcare. However, John Hancock Income is 1.88 times less risky than Gabelli Healthcare. It trades about -0.03 of its potential returns per unit of risk. Gabelli Healthcare WellnessRx is currently generating about -0.05 per unit of risk. If you would invest 1,133 in John Hancock Income on November 8, 2024 and sell it today you would lose (12.00) from holding John Hancock Income or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Income vs. Gabelli Healthcare WellnessRx
Performance |
| Timeline |
| John Hancock Income |
| Gabelli Healthcare |
John Hancock and Gabelli Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Gabelli Healthcare
The main advantage of trading using opposite John Hancock and Gabelli Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Gabelli Healthcare 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 Gabelli Healthcare will offset losses from the drop in Gabelli Healthcare's long position.| John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
| Gabelli Healthcare vs. GAMCO Natural Resources | Gabelli Healthcare vs. Gabelli Global Small | Gabelli Healthcare vs. John Hancock Income | Gabelli Healthcare vs. Gabelli MultiMedia Mutual |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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