Correlation Between John Hancock and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both John Hancock and Aqr Managed 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 Aqr Managed 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 Aqr Managed Futures, you can compare the effects of market volatilities on John Hancock and Aqr Managed 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 Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Aqr Managed.
Diversification Opportunities for John Hancock and Aqr Managed
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between John and AQR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures 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 Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of John Hancock i.e., John Hancock and Aqr Managed go up and down completely randomly.
Pair Corralation between John Hancock and Aqr Managed
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Aqr Managed. In addition to that, John Hancock is 1.12 times more volatile than Aqr Managed Futures. It trades about -0.36 of its total potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.25 per unit of volatility. If you would invest 851.00 in Aqr Managed Futures on December 5, 2024 and sell it today you would earn a total of 45.00 from holding Aqr Managed Futures or generate 5.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Financial vs. Aqr Managed Futures
Performance |
Timeline |
John Hancock Financial |
Aqr Managed Futures |
John Hancock and Aqr Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Aqr Managed
The main advantage of trading using opposite John Hancock and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Aqr Managed 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 Aqr Managed will offset losses from the drop in Aqr Managed's long position.John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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