Correlation Between Tekla Healthcare and John Hancock
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare 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 Tekla Healthcare and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Healthcare Opportunities and John Hancock Preferred, you can compare the effects of market volatilities on Tekla Healthcare 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 Tekla Healthcare with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and John Hancock.
Diversification Opportunities for Tekla Healthcare and John Hancock
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekla and John is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred and Tekla Healthcare 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 Tekla Healthcare Opportunities 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 Preferred has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and John Hancock go up and down completely randomly.
Pair Corralation between Tekla Healthcare and John Hancock
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.01 times less return on investment than John Hancock. In addition to that, Tekla Healthcare is 1.12 times more volatile than John Hancock Preferred. It trades about 0.07 of its total potential returns per unit of risk. John Hancock Preferred is currently generating about 0.08 per unit of volatility. If you would invest 1,611 in John Hancock Preferred on September 2, 2024 and sell it today you would earn a total of 154.00 from holding John Hancock Preferred or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. John Hancock Preferred
Performance |
| Timeline |
| Tekla Healthcare Opp |
| John Hancock Preferred |
Tekla Healthcare and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and John Hancock
The main advantage of trading using opposite Tekla Healthcare and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare 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.| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. John Hancock Tax |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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