Correlation Between John Hancock and Nationwide Investor
Can any of the company-specific risk be diversified away by investing in both John Hancock and Nationwide Investor 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 John Hancock and Nationwide Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Financial and Nationwide Investor Destinations, you can compare the effects of market volatilities on John Hancock and Nationwide Investor 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 John Hancock with a short position of Nationwide Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Nationwide Investor.
Diversification Opportunities for John Hancock and Nationwide Investor
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Nationwide is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Nationwide Investor Destinatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Investor and John Hancock 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 John Hancock Financial are associated (or correlated) with Nationwide Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Investor has no effect on the direction of John Hancock i.e., John Hancock and Nationwide Investor go up and down completely randomly.
Pair Corralation between John Hancock and Nationwide Investor
Considering the 90-day investment horizon John Hancock Financial is expected to generate 4.44 times more return on investment than Nationwide Investor. However, John Hancock is 4.44 times more volatile than Nationwide Investor Destinations. It trades about 0.1 of its potential returns per unit of risk. Nationwide Investor Destinations is currently generating about -0.07 per unit of risk. If you would invest 3,329 in John Hancock Financial on October 23, 2024 and sell it today you would earn a total of 339.00 from holding John Hancock Financial or generate 10.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Financial vs. Nationwide Investor Destinatio
Performance |
Timeline |
John Hancock Financial |
Nationwide Investor |
John Hancock and Nationwide Investor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Nationwide Investor
The main advantage of trading using opposite John Hancock and Nationwide Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Nationwide Investor 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 Nationwide Investor will offset losses from the drop in Nationwide Investor's long position.John Hancock vs. Tekla Life Sciences | ||
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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