Correlation Between Travelers Companies and John Hancock
Can any of the company-specific risk be diversified away by investing in both Travelers Companies 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 Travelers Companies and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and John Hancock Multifactor, you can compare the effects of market volatilities on Travelers Companies 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 Travelers Companies with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and John Hancock.
Diversification Opportunities for Travelers Companies and John Hancock
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and John is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Travelers Companies 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 The Travelers Companies 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 Multifactor has no effect on the direction of Travelers Companies i.e., Travelers Companies and John Hancock go up and down completely randomly.
Pair Corralation between Travelers Companies and John Hancock
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.76 times more return on investment than John Hancock. However, Travelers Companies is 1.76 times more volatile than John Hancock Multifactor. It trades about 0.07 of its potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.1 per unit of risk. If you would invest 21,792 in The Travelers Companies on August 27, 2024 and sell it today you would earn a total of 4,455 from holding The Travelers Companies or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. John Hancock Multifactor
Performance |
| Timeline |
| The Travelers Companies |
| John Hancock Multifactor |
Travelers Companies and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and John Hancock
The main advantage of trading using opposite Travelers Companies and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies 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.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| John Hancock vs. Vanguard Mid Cap Index | John Hancock vs. Vanguard Extended Market | John Hancock vs. iShares Core SP | John Hancock vs. SPDR SP MIDCAP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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