Correlation Between SSGA Active and John Hancock
Can any of the company-specific risk be diversified away by investing in both SSGA Active 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 SSGA Active and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSGA Active Trust and John Hancock Exchange Traded, you can compare the effects of market volatilities on SSGA Active 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 SSGA Active with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and John Hancock.
Diversification Opportunities for SSGA Active and John Hancock
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SSGA and John is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and John Hancock Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and SSGA Active 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 SSGA Active Trust 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 Exchange has no effect on the direction of SSGA Active i.e., SSGA Active and John Hancock go up and down completely randomly.
Pair Corralation between SSGA Active and John Hancock
Given the investment horizon of 90 days SSGA Active is expected to generate 1.19 times less return on investment than John Hancock. But when comparing it to its historical volatility, SSGA Active Trust is 1.35 times less risky than John Hancock. It trades about 0.16 of its potential returns per unit of risk. John Hancock Exchange Traded is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,552 in John Hancock Exchange Traded on August 29, 2024 and sell it today you would earn a total of 109.00 from holding John Hancock Exchange Traded or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. John Hancock Exchange Traded
Performance |
| Timeline |
| SSGA Active Trust |
| John Hancock Exchange |
SSGA Active and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and John Hancock
The main advantage of trading using opposite SSGA Active and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active 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.| SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Nuveen Municipal |
| John Hancock vs. SSGA Active Trust | John Hancock vs. SPDR Nuveen Municipal | John Hancock vs. iShares Short Maturity | John Hancock vs. First Trust Flexible |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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