Correlation Between John Hancock and American Independence
Can any of the company-specific risk be diversified away by investing in both John Hancock and American Independence 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 American Independence 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 American Independence Kansas, you can compare the effects of market volatilities on John Hancock and American Independence 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 American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and American Independence.
Diversification Opportunities for John Hancock and American Independence
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of John Hancock i.e., John Hancock and American Independence go up and down completely randomly.
Pair Corralation between John Hancock and American Independence
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the American Independence. In addition to that, John Hancock is 6.65 times more volatile than American Independence Kansas. It trades about -0.31 of its total potential returns per unit of risk. American Independence Kansas is currently generating about -0.24 per unit of volatility. If you would invest 1,015 in American Independence Kansas on September 25, 2024 and sell it today you would lose (10.00) from holding American Independence Kansas or give up 0.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
John Hancock Financial vs. American Independence Kansas
Performance |
Timeline |
John Hancock Financial |
American Independence |
John Hancock and American Independence Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and American Independence
The main advantage of trading using opposite John Hancock and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed | John Hancock vs. Cohen Steers Reit |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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