Correlation Between John Hancock and Sit Small
Can any of the company-specific risk be diversified away by investing in both John Hancock and Sit Small 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 Sit Small 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 Sit Small Cap, you can compare the effects of market volatilities on John Hancock and Sit Small 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 Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Sit Small.
Diversification Opportunities for John Hancock and Sit Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Sit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap 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 Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of John Hancock i.e., John Hancock and Sit Small go up and down completely randomly.
Pair Corralation between John Hancock and Sit Small
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.32 times more return on investment than Sit Small. However, John Hancock is 1.32 times more volatile than Sit Small Cap. It trades about -0.09 of its potential returns per unit of risk. Sit Small Cap is currently generating about -0.17 per unit of risk. If you would invest 3,854 in John Hancock Financial on December 2, 2024 and sell it today you would lose (289.00) from holding John Hancock Financial or give up 7.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Financial vs. Sit Small Cap
Performance |
Timeline |
John Hancock Financial |
Sit Small Cap |
John Hancock and Sit Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Sit Small
The main advantage of trading using opposite John Hancock and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Sit Small 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 Sit Small will offset losses from the drop in Sit Small'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 |
Sit Small vs. Sit Small Cap | Sit Small vs. Sit Global Dividend | Sit Small vs. Sit Global Dividend | Sit Small vs. Sit Small Cap |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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