Correlation Between Sarofim Equity and John Hancock
Can any of the company-specific risk be diversified away by investing in both Sarofim Equity 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 Sarofim Equity and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarofim Equity and John Hancock Focused, you can compare the effects of market volatilities on Sarofim Equity 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 Sarofim Equity with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarofim Equity and John Hancock.
Diversification Opportunities for Sarofim Equity and John Hancock
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sarofim and John is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sarofim Equity and John Hancock Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Focused and Sarofim Equity 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 Sarofim Equity 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 Focused has no effect on the direction of Sarofim Equity i.e., Sarofim Equity and John Hancock go up and down completely randomly.
Pair Corralation between Sarofim Equity and John Hancock
Assuming the 90 days horizon Sarofim Equity is expected to generate 2.9 times more return on investment than John Hancock. However, Sarofim Equity is 2.9 times more volatile than John Hancock Focused. It trades about 0.28 of its potential returns per unit of risk. John Hancock Focused is currently generating about 0.13 per unit of risk. If you would invest 1,685 in Sarofim Equity on September 17, 2024 and sell it today you would earn a total of 35.00 from holding Sarofim Equity or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarofim Equity vs. John Hancock Focused
Performance |
| Timeline |
| Sarofim Equity |
| John Hancock Focused |
Sarofim Equity and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarofim Equity and John Hancock
The main advantage of trading using opposite Sarofim Equity and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarofim Equity 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.| Sarofim Equity vs. Goldman Sachs Clean | Sarofim Equity vs. Gamco Global Gold | Sarofim Equity vs. Invesco Gold Special | Sarofim Equity vs. Short Precious Metals |
| John Hancock vs. Cutler Equity | John Hancock vs. Qs International Equity | John Hancock vs. Sarofim Equity | John Hancock vs. Locorr Dynamic Equity |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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