Correlation Between Adams Natural and John Hancock
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and John Hancock Global, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and John Hancock.
Diversification Opportunities for Adams Natural and John Hancock
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adams and John is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Adams Natural 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 Adams Natural Resources 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 Global has no effect on the direction of Adams Natural i.e., Adams Natural and John Hancock go up and down completely randomly.
Pair Corralation between Adams Natural and John Hancock
Considering the 90-day investment horizon Adams Natural is expected to generate 1.73 times less return on investment than John Hancock. In addition to that, Adams Natural is 1.65 times more volatile than John Hancock Global. It trades about 0.04 of its total potential returns per unit of risk. John Hancock Global is currently generating about 0.11 per unit of volatility. If you would invest 1,001 in John Hancock Global on September 12, 2024 and sell it today you would earn a total of 252.00 from holding John Hancock Global or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. John Hancock Global
Performance |
| Timeline |
| Adams Natural Resources |
| John Hancock Global |
Adams Natural and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and John Hancock
The main advantage of trading using opposite Adams Natural and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Oxford Lane Capital | Adams Natural vs. Orchid Island Capital | Adams Natural vs. Guggenheim Strategic Opportunities | Adams Natural vs. Stone Harbor Emerging |
| John Hancock vs. Dodge Global Stock | John Hancock vs. Franklin Mutual Global | John Hancock vs. T Rowe Price | John Hancock vs. HUMANA INC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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