Correlation Between Angel Oak and John Hancock
Can any of the company-specific risk be diversified away by investing in both Angel Oak 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 Angel Oak and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Financial and John Hancock Financial, you can compare the effects of market volatilities on Angel Oak 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 Angel Oak with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and John Hancock.
Diversification Opportunities for Angel Oak and John Hancock
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and John is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial 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 Angel Oak 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 Angel Oak Financial 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 Angel Oak i.e., Angel Oak and John Hancock go up and down completely randomly.
Pair Corralation between Angel Oak and John Hancock
Assuming the 90 days horizon Angel Oak Financial is expected to under-perform the John Hancock. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Financial is 7.86 times less risky than John Hancock. The mutual fund trades about -0.05 of its potential returns per unit of risk. The John Hancock Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,938 in John Hancock Financial on August 24, 2024 and sell it today you would earn a total of 885.00 from holding John Hancock Financial or generate 30.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. John Hancock Financial
Performance |
| Timeline |
| Angel Oak Financial |
| John Hancock Financial |
Angel Oak and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and John Hancock
The main advantage of trading using opposite Angel Oak and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak 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.| Angel Oak vs. Ishares Municipal Bond | Angel Oak vs. Metropolitan West Porate | Angel Oak vs. California Bond Fund | Angel Oak vs. T Rowe Price |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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