Correlation Between Microsoft and John Hancock
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and John Hancock Disciplined, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and John Hancock.
Diversification Opportunities for Microsoft and John Hancock
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and John is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Microsoft 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 Microsoft 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 Disciplined has no effect on the direction of Microsoft i.e., Microsoft and John Hancock go up and down completely randomly.
Pair Corralation between Microsoft and John Hancock
Given the investment horizon of 90 days Microsoft is expected to under-perform the John Hancock. In addition to that, Microsoft is 1.61 times more volatile than John Hancock Disciplined. It trades about 0.0 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.23 per unit of volatility. If you would invest 3,077 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 172.00 from holding John Hancock Disciplined or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. John Hancock Disciplined
Performance |
| Timeline |
| Microsoft |
| John Hancock Disciplined |
Microsoft and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and John Hancock
The main advantage of trading using opposite Microsoft and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| John Hancock vs. Mfs Value Fund | John Hancock vs. Mfs International Value | John Hancock vs. Metropolitan West Total | John Hancock vs. Mfs International Diversification |
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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