Correlation Between Red Oak and J Hancock
Can any of the company-specific risk be diversified away by investing in both Red Oak and J 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 Red Oak and J Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and J Hancock Ii, you can compare the effects of market volatilities on Red Oak and J 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 Red Oak with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and J Hancock.
Diversification Opportunities for Red Oak and J Hancock
Almost no diversification
The 3 months correlation between Red and JRETX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and Red Oak 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 Red Oak Technology are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of Red Oak i.e., Red Oak and J Hancock go up and down completely randomly.
Pair Corralation between Red Oak and J Hancock
Assuming the 90 days horizon Red Oak Technology is expected to generate 1.57 times more return on investment than J Hancock. However, Red Oak is 1.57 times more volatile than J Hancock Ii. It trades about 0.1 of its potential returns per unit of risk. J Hancock Ii is currently generating about 0.09 per unit of risk. If you would invest 2,843 in Red Oak Technology on September 3, 2024 and sell it today you would earn a total of 2,042 from holding Red Oak Technology or generate 71.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. J Hancock Ii
Performance |
| Timeline |
| Red Oak Technology |
| J Hancock Ii |
Red Oak and J Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and J Hancock
The main advantage of trading using opposite Red Oak and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak position performs unexpectedly, J 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 J Hancock will offset losses from the drop in J Hancock's long position.| Red Oak vs. Vanguard Information Technology | Red Oak vs. Technology Portfolio Technology | Red Oak vs. Fidelity Select Semiconductors | Red Oak vs. Software And It |
| J Hancock vs. Columbia Global Technology | J Hancock vs. Blackrock Science Technology | J Hancock vs. Janus Global Technology | J Hancock vs. Red Oak Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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