Correlation Between XAI Octagon and John Hancock
Can any of the company-specific risk be diversified away by investing in both XAI Octagon 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 XAI Octagon and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and John Hancock Financial, you can compare the effects of market volatilities on XAI Octagon 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 XAI Octagon with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and John Hancock.
Diversification Opportunities for XAI Octagon and John Hancock
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XAI and John is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating 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 XAI Octagon 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 XAI Octagon Floating 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 XAI Octagon i.e., XAI Octagon and John Hancock go up and down completely randomly.
Pair Corralation between XAI Octagon and John Hancock
Given the investment horizon of 90 days XAI Octagon is expected to generate 7.83 times less return on investment than John Hancock. But when comparing it to its historical volatility, XAI Octagon Floating is 4.1 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 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,669 in John Hancock Financial on September 3, 2024 and sell it today you would earn a total of 1,271 from holding John Hancock Financial or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAI Octagon Floating vs. John Hancock Financial
Performance |
| Timeline |
| XAI Octagon Floating |
| John Hancock Financial |
XAI Octagon and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAI Octagon and John Hancock
The main advantage of trading using opposite XAI Octagon and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon 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.| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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