Correlation Between John Hancock and John Hancock
Can any of the company-specific risk be diversified away by investing in both John Hancock 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 John Hancock and John Hancock 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 John Hancock Hedged, you can compare the effects of market volatilities on John Hancock 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 John Hancock with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and John Hancock.
Diversification Opportunities for John Hancock and John Hancock
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and John is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Premium and John Hancock Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Hedged 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 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 Hedged has no effect on the direction of John Hancock i.e., John Hancock and John Hancock go up and down completely randomly.
Pair Corralation between John Hancock and John Hancock
Considering the 90-day investment horizon John Hancock Premium is expected to generate 1.42 times more return on investment than John Hancock. However, John Hancock is 1.42 times more volatile than John Hancock Hedged. It trades about 0.06 of its potential returns per unit of risk. John Hancock Hedged is currently generating about 0.05 per unit of risk. If you would invest 1,055 in John Hancock Premium on August 29, 2024 and sell it today you would earn a total of 245.00 from holding John Hancock Premium or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Premium vs. John Hancock Hedged
Performance |
| Timeline |
| John Hancock Premium |
| John Hancock Hedged |
John Hancock and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and John Hancock
The main advantage of trading using opposite John Hancock and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock 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 John Hancock Premium and John Hancock Hedged 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.| John Hancock vs. Ellsworth Convertible Growth | John Hancock vs. Delaware Investments Florida | John Hancock vs. RENN Fund | John Hancock vs. Nuveen New Jersey |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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