Correlation Between John Hancock and Aqr Large
Can any of the company-specific risk be diversified away by investing in both John Hancock and Aqr Large 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 Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Investment and Aqr Large Cap, you can compare the effects of market volatilities on John Hancock and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Aqr Large.
Diversification Opportunities for John Hancock and Aqr Large
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Aqr is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Investment are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of John Hancock i.e., John Hancock and Aqr Large go up and down completely randomly.
Pair Corralation between John Hancock and Aqr Large
Assuming the 90 days horizon John Hancock Investment is expected to generate 0.83 times more return on investment than Aqr Large. However, John Hancock Investment is 1.2 times less risky than Aqr Large. It trades about 0.09 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.04 per unit of risk. If you would invest 5,572 in John Hancock Investment on September 2, 2024 and sell it today you would earn a total of 2,680 from holding John Hancock Investment or generate 48.1% 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 Investment vs. Aqr Large Cap
Performance |
| Timeline |
| John Hancock Investment |
| Aqr Large Cap |
John Hancock and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Aqr Large
The main advantage of trading using opposite John Hancock and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard 500 Index | John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard Total Stock |
| Aqr Large vs. Aqr Long Short Equity | Aqr Large vs. Old Westbury Short Term | Aqr Large vs. Federated Ultrashort Bond | Aqr Large vs. Sterling Capital Short |
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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