Correlation Between Thornburg Limited and John Hancock
Can any of the company-specific risk be diversified away by investing in both Thornburg Limited 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 Thornburg Limited and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Limited Term and John Hancock Financial, you can compare the effects of market volatilities on Thornburg Limited 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 Thornburg Limited with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Limited and John Hancock.
Diversification Opportunities for Thornburg Limited and John Hancock
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thornburg and John is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Limited Term and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Thornburg Limited 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 Thornburg Limited Term 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 Financial has no effect on the direction of Thornburg Limited i.e., Thornburg Limited and John Hancock go up and down completely randomly.
Pair Corralation between Thornburg Limited and John Hancock
Assuming the 90 days horizon Thornburg Limited is expected to generate 12.78 times less return on investment than John Hancock. But when comparing it to its historical volatility, Thornburg Limited Term is 4.54 times less risky than John Hancock. It trades about 0.06 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,785 in John Hancock Financial on September 12, 2024 and sell it today you would earn a total of 107.00 from holding John Hancock Financial or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thornburg Limited Term vs. John Hancock Financial
Performance |
| Timeline |
| Thornburg Limited Term |
| John Hancock Financial |
Thornburg Limited and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Limited and John Hancock
The main advantage of trading using opposite Thornburg Limited and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Limited 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.| Thornburg Limited vs. Pace Smallmedium Value | Thornburg Limited vs. Mutual Of America | Thornburg Limited vs. Fpa Queens Road | Thornburg Limited vs. Vanguard Small Cap Value |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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