Correlation Between William Blair and John Hancock
Can any of the company-specific risk be diversified away by investing in both William Blair 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 William Blair and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair Emerging and John Hancock Financial, you can compare the effects of market volatilities on William Blair 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 William Blair with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and John Hancock.
Diversification Opportunities for William Blair and John Hancock
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between William and John is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Emerging 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 William Blair 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 William Blair Emerging 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 William Blair i.e., William Blair and John Hancock go up and down completely randomly.
Pair Corralation between William Blair and John Hancock
Assuming the 90 days horizon William Blair is expected to generate 1.65 times less return on investment than John Hancock. But when comparing it to its historical volatility, William Blair Emerging is 4.65 times less risky than John Hancock. It trades about 0.11 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,815 in John Hancock Financial on September 14, 2024 and sell it today you would earn a total of 947.00 from holding John Hancock Financial or generate 33.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair Emerging vs. John Hancock Financial
Performance |
| Timeline |
| William Blair Emerging |
| John Hancock Financial |
William Blair and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and John Hancock
The main advantage of trading using opposite William Blair and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair 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.| William Blair vs. Calamos Dynamic Convertible | William Blair vs. Fidelity Sai Convertible | William Blair vs. Gabelli Convertible And | William Blair vs. Virtus Convertible |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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