Correlation Between Altegris/aaca Opportunistic and John Hancock
Can any of the company-specific risk be diversified away by investing in both Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altegrisaaca Opportunistic Real and John Hancock Government, you can compare the effects of market volatilities on Altegris/aaca Opportunistic 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 Altegris/aaca Opportunistic with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris/aaca Opportunistic and John Hancock.
Diversification Opportunities for Altegris/aaca Opportunistic and John Hancock
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Altegris/aaca and John is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Altegrisaaca Opportunistic Rea and John Hancock Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Government and Altegris/aaca Opportunistic 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 Altegrisaaca Opportunistic Real 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 Government has no effect on the direction of Altegris/aaca Opportunistic i.e., Altegris/aaca Opportunistic and John Hancock go up and down completely randomly.
Pair Corralation between Altegris/aaca Opportunistic and John Hancock
Assuming the 90 days horizon Altegrisaaca Opportunistic Real is expected to generate 2.45 times more return on investment than John Hancock. However, Altegris/aaca Opportunistic is 2.45 times more volatile than John Hancock Government. It trades about 0.3 of its potential returns per unit of risk. John Hancock Government is currently generating about 0.07 per unit of risk. If you would invest 1,257 in Altegrisaaca Opportunistic Real on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Altegrisaaca Opportunistic Real or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altegrisaaca Opportunistic Rea vs. John Hancock Government
Performance |
| Timeline |
| Altegris/aaca Opportunistic |
| John Hancock Government |
Altegris/aaca Opportunistic and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altegris/aaca Opportunistic and John Hancock
The main advantage of trading using opposite Altegris/aaca Opportunistic and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris/aaca Opportunistic 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 Altegrisaaca Opportunistic Real and John Hancock Government 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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