Correlation Between John Hancock and Queens Road

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Can any of the company-specific risk be diversified away by investing in both John Hancock and Queens Road 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 Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Ii and Queens Road Small, you can compare the effects of market volatilities on John Hancock and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Queens Road.

Diversification Opportunities for John Hancock and Queens Road

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between John and Queens is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small 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 Ii are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of John Hancock i.e., John Hancock and Queens Road go up and down completely randomly.

Pair Corralation between John Hancock and Queens Road

Assuming the 90 days horizon John Hancock Ii is expected to generate 0.8 times more return on investment than Queens Road. However, John Hancock Ii is 1.24 times less risky than Queens Road. It trades about 0.07 of its potential returns per unit of risk. Queens Road Small is currently generating about -0.08 per unit of risk. If you would invest  1,895  in John Hancock Ii on September 20, 2024 and sell it today you would earn a total of  21.00  from holding John Hancock Ii or generate 1.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.24%
ValuesDaily Returns

John Hancock Ii  vs.  Queens Road Small

 Performance 
       Timeline  
John Hancock Ii 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Ii are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Queens Road Small 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Small are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Queens Road is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock and Queens Road Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with John Hancock and Queens Road

The main advantage of trading using opposite John Hancock and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.
The idea behind John Hancock Ii and Queens Road Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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