Correlation Between Rational/pier and John Hancock
Can any of the company-specific risk be diversified away by investing in both Rational/pier 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 Rational/pier and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rationalpier 88 Convertible and John Hancock Bond, you can compare the effects of market volatilities on Rational/pier 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 Rational/pier with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational/pier and John Hancock.
Diversification Opportunities for Rational/pier and John Hancock
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rational/pier and John is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Rationalpier 88 Convertible and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond and Rational/pier 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 Rationalpier 88 Convertible 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 Bond has no effect on the direction of Rational/pier i.e., Rational/pier and John Hancock go up and down completely randomly.
Pair Corralation between Rational/pier and John Hancock
Assuming the 90 days horizon Rationalpier 88 Convertible is expected to generate 1.32 times more return on investment than John Hancock. However, Rational/pier is 1.32 times more volatile than John Hancock Bond. It trades about 0.42 of its potential returns per unit of risk. John Hancock Bond is currently generating about 0.11 per unit of risk. If you would invest 1,117 in Rationalpier 88 Convertible on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Rationalpier 88 Convertible or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rationalpier 88 Convertible vs. John Hancock Bond
Performance |
| Timeline |
| Rationalpier 88 Conv |
| John Hancock Bond |
Rational/pier and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rational/pier and John Hancock
The main advantage of trading using opposite Rational/pier and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational/pier 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.| Rational/pier vs. Blackrock Financial Institutions | Rational/pier vs. Royce Global Financial | Rational/pier vs. Goldman Sachs Financial | Rational/pier vs. Prudential Jennison Financial |
| John Hancock vs. Ep Emerging Markets | John Hancock vs. Growth Strategy Fund | John Hancock vs. Ashmore Emerging Markets | John Hancock vs. Origin Emerging Markets |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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