Correlation Between Boeing and John Hancock

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

By analyzing existing cross correlation between The Boeing and John Hancock Multifactor, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and John Hancock.

Diversification Opportunities for Boeing and John Hancock

-0.38

Correlation Coefficient

Boeing  John Hancock

Very good diversification

The 3 months correlation between Boeing and John is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Boeing 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 The Boeing 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 Multifactor has no effect on the direction of Boeing i.e., Boeing and John Hancock go up and down completely randomly.

Pair Corralation between Boeing and John Hancock

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the John Hancock. In addition to that, Boeing is 1.74 times more volatile than John Hancock Multifactor. It trades about -0.01 of its total potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.05 per unit of volatility. If you would invest  3,319  in John Hancock Multifactor on October 27, 2024 and sell it today you would earn a total of  847.00  from holding John Hancock Multifactor or generate 25.52% return on investment over 90 days.

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

The Boeing  vs.  John Hancock Multifactor

Boeing

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Multifactor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, John Hancock is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Boeing and John Hancock

The main advantage of trading using opposite Boeing and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.

The idea behind The Boeing and John Hancock Multifactor 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.