Correlation Between IShares Broad and John Hancock
Can any of the company-specific risk be diversified away by investing in both IShares Broad 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 IShares Broad and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Broad USD and John Hancock Exchange, you can compare the effects of market volatilities on IShares Broad 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 IShares Broad with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and John Hancock.
Diversification Opportunities for IShares Broad and John Hancock
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and John is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad USD and John Hancock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and IShares Broad 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 iShares Broad USD 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 Exchange has no effect on the direction of IShares Broad i.e., IShares Broad and John Hancock go up and down completely randomly.
Pair Corralation between IShares Broad and John Hancock
Given the investment horizon of 90 days IShares Broad is expected to generate 2.74 times less return on investment than John Hancock. But when comparing it to its historical volatility, iShares Broad USD is 1.37 times less risky than John Hancock. It trades about 0.2 of its potential returns per unit of risk. John Hancock Exchange is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 3,603 in John Hancock Exchange on September 2, 2024 and sell it today you would earn a total of 184.00 from holding John Hancock Exchange or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Broad USD vs. John Hancock Exchange
Performance |
| Timeline |
| iShares Broad USD |
| John Hancock Exchange |
IShares Broad and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Broad and John Hancock
The main advantage of trading using opposite IShares Broad and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad 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.| IShares Broad vs. iShares 5 10 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. iShares 1 5 Year | IShares Broad vs. iShares 0 5 Year |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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