Correlation Between John Hancock and Dow Jones
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dow Jones 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 John Hancock and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Premium and Dow Jones Industrial, you can compare the effects of market volatilities on John Hancock and Dow Jones 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 John Hancock with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dow Jones.
Diversification Opportunities for John Hancock and Dow Jones
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between John and Dow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Premium and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and John Hancock 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 John Hancock Premium are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of John Hancock i.e., John Hancock and Dow Jones go up and down completely randomly.
Pair Corralation between John Hancock and Dow Jones
Considering the 90-day investment horizon John Hancock is expected to generate 1.93 times less return on investment than Dow Jones. In addition to that, John Hancock is 1.41 times more volatile than Dow Jones Industrial. It trades about 0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,359,634 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,070,017 from holding Dow Jones Industrial or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Premium vs. Dow Jones Industrial
Performance |
| Timeline |
John Hancock and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
John Hancock Premium
Pair trading matchups for John Hancock
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with John Hancock and Dow Jones
The main advantage of trading using opposite John Hancock and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| John Hancock vs. John Hancock Preferred | John Hancock vs. Eaton Vance Tax | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |