Correlation Between ProShares and John Hancock
Can any of the company-specific risk be diversified away by investing in both ProShares 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 ProShares and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and John Hancock Exchange, you can compare the effects of market volatilities on ProShares 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 ProShares with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and John Hancock.
Diversification Opportunities for ProShares and John Hancock
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and John is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and John Hancock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and ProShares 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 ProShares SP 500 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 ProShares i.e., ProShares and John Hancock go up and down completely randomly.
Pair Corralation between ProShares and John Hancock
Given the investment horizon of 90 days ProShares is expected to generate 1.76 times less return on investment than John Hancock. But when comparing it to its historical volatility, ProShares SP 500 is 1.11 times less risky than John Hancock. It trades about 0.06 of its potential returns per unit of risk. John Hancock Exchange is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,629 in John Hancock Exchange on August 30, 2024 and sell it today you would earn a total of 1,136 from holding John Hancock Exchange or generate 43.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP 500 vs. John Hancock Exchange
Performance |
| Timeline |
| ProShares SP 500 |
| John Hancock Exchange |
ProShares and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and John Hancock
The main advantage of trading using opposite ProShares and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares 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.| ProShares vs. iShares Core Dividend | ProShares vs. SPDR SP Dividend | ProShares vs. Invesco SP 500 | ProShares vs. Vanguard Dividend Appreciation |
| John Hancock vs. iShares MSCI USA | John Hancock vs. ABIVAX Socit Anonyme | John Hancock vs. HUMANA INC | John Hancock vs. SCOR PK |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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