Correlation Between Oppenheimer International and John Hancock
Can any of the company-specific risk be diversified away by investing in both Oppenheimer International 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 Oppenheimer International and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer International Growth and John Hancock Disciplined, you can compare the effects of market volatilities on Oppenheimer International 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 Oppenheimer International with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and John Hancock.
Diversification Opportunities for Oppenheimer International and John Hancock
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oppenheimer and John is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Grow 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 Oppenheimer International 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 Oppenheimer International Growth 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 Oppenheimer International i.e., Oppenheimer International and John Hancock go up and down completely randomly.
Pair Corralation between Oppenheimer International and John Hancock
Assuming the 90 days horizon Oppenheimer International Growth is expected to under-perform the John Hancock. In addition to that, Oppenheimer International is 1.14 times more volatile than John Hancock Disciplined. It trades about -0.03 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.14 per unit of volatility. If you would invest 2,493 in John Hancock Disciplined on September 12, 2024 and sell it today you would earn a total of 171.00 from holding John Hancock Disciplined or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer International Grow vs. John Hancock Disciplined
Performance |
| Timeline |
| Oppenheimer International |
| John Hancock Disciplined |
Oppenheimer International and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer International and John Hancock
The main advantage of trading using opposite Oppenheimer International and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International 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.The idea behind Oppenheimer International Growth and John Hancock Disciplined 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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