Correlation Between American Century and J Hancock

Can any of the company-specific risk be diversified away by investing in both American Century and J 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 American Century and J Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Century Etf and J Hancock Ii, you can compare the effects of market volatilities on American Century and J 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 American Century with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and J Hancock.

Diversification Opportunities for American Century and J Hancock

0.82

Correlation Coefficient

American Century  J Hancock

Very poor diversification

The 3 months correlation between American and JRODX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding American Century Etf and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and American Century 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 American Century Etf are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of American Century i.e., American Century and J Hancock go up and down completely randomly.

Pair Corralation between American Century and J Hancock

Assuming the 90 days horizon American Century Etf is expected to generate 1.77 times more return on investment than J Hancock. However, American Century is 1.77 times more volatile than J Hancock Ii. It trades about 0.06 of its potential returns per unit of risk. J Hancock Ii is currently generating about 0.09 per unit of risk. If you would invest  1,344  in American Century Etf on September 4, 2024 and sell it today you would earn a total of  590.00  from holding American Century Etf or generate 43.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

American Century Etf  vs.  J Hancock Ii

American Century Etf

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Century Etf are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, American Century showed solid returns over the last few months and may actually be approaching a breakup point.

J Hancock Ii

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in J Hancock Ii are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, J Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with American Century and J Hancock

The main advantage of trading using opposite American Century and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, J 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 J Hancock will offset losses from the drop in J Hancock's long position.

The idea behind American Century Etf and J Hancock Ii pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.