Correlation Between Blackrock Gwth and John Hancock

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

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

Diversification Opportunities for Blackrock Gwth and John Hancock

0.66

Correlation Coefficient

Blackrock Gwth  John Hancock

Poor diversification

The 3 months correlation between Blackrock and John is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Gwth Prepared and John Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Ii and Blackrock Gwth 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 Blackrock Gwth Prepared 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 Ii has no effect on the direction of Blackrock Gwth i.e., Blackrock Gwth and John Hancock go up and down completely randomly.

Pair Corralation between Blackrock Gwth and John Hancock

Assuming the 90 days horizon Blackrock Gwth Prepared is expected to generate 0.63 times more return on investment than John Hancock. However, Blackrock Gwth Prepared is 1.6 times less risky than John Hancock. It trades about -0.03 of its potential returns per unit of risk. John Hancock Ii is currently generating about -0.07 per unit of risk. If you would invest  1,470  in Blackrock Gwth Prepared on December 28, 2024 and sell it today you would lose (19.00) from holding Blackrock Gwth Prepared or give up 1.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Blackrock Gwth Prepared  vs.  John Hancock Ii

Blackrock Gwth Prepared

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Gwth Prepared has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Gwth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Ii

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Ii has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Gwth and John Hancock

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