Correlation Between SPDR SP and John Hancock
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Oil and John Hancock Exchange, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and John Hancock.
Diversification Opportunities for SPDR SP and John Hancock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and John is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Oil 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 SPDR SP 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 SPDR SP Oil 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 SPDR SP i.e., SPDR SP and John Hancock go up and down completely randomly.
Pair Corralation between SPDR SP and John Hancock
Considering the 90-day investment horizon SPDR SP is expected to generate 12.82 times less return on investment than John Hancock. In addition to that, SPDR SP is 1.81 times more volatile than John Hancock Exchange. It trades about 0.01 of its total potential returns per unit of risk. John Hancock Exchange is currently generating about 0.14 per unit of volatility. If you would invest 3,285 in John Hancock Exchange on September 1, 2024 and sell it today you would earn a total of 502.00 from holding John Hancock Exchange or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR SP Oil vs. John Hancock Exchange
Performance |
| Timeline |
| SPDR SP Oil |
| John Hancock Exchange |
SPDR SP and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and John Hancock
The main advantage of trading using opposite SPDR SP and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. VanEck Oil Services | SPDR SP vs. SPDR SP Metals | SPDR SP vs. Energy Select Sector | SPDR SP vs. SPDR SP Retail |
| John Hancock vs. iShares Core SP | John Hancock vs. iShares Core MSCI | John Hancock vs. iShares Broad USD | John Hancock vs. iShares Core SP |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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