Correlation Between Retirement Living and John Hancock
Can any of the company-specific risk be diversified away by investing in both Retirement Living and John Hancock 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 Retirement Living and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retirement Living Through and John Hancock Enduring, you can compare the effects of market volatilities on Retirement Living and John Hancock 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 Retirement Living with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retirement Living and John Hancock.
Diversification Opportunities for Retirement Living and John Hancock
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retirement and John is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Retirement Living Through and John Hancock Enduring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Enduring and Retirement Living 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 Retirement Living Through are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Enduring has no effect on the direction of Retirement Living i.e., Retirement Living and John Hancock go up and down completely randomly.
Pair Corralation between Retirement Living and John Hancock
Assuming the 90 days horizon Retirement Living is expected to generate 1.25 times less return on investment than John Hancock. But when comparing it to its historical volatility, Retirement Living Through is 1.61 times less risky than John Hancock. It trades about 0.35 of its potential returns per unit of risk. John Hancock Enduring is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,509 in John Hancock Enduring on September 1, 2024 and sell it today you would earn a total of 53.00 from holding John Hancock Enduring or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retirement Living Through vs. John Hancock Enduring
Performance |
| Timeline |
| Retirement Living Through |
| John Hancock Enduring |
Retirement Living and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retirement Living and John Hancock
The main advantage of trading using opposite Retirement Living and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retirement Living position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Retirement Living vs. Regional Bank Fund | Retirement Living vs. Regional Bank Fund | Retirement Living vs. Multimanager Lifestyle Moderate | Retirement Living vs. Multimanager Lifestyle Balanced |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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