Correlation Between John Hancock and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both John Hancock and Tiaa Cref 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 Tiaa Cref 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 Tiaa Cref Mid Cap Value, you can compare the effects of market volatilities on John Hancock and Tiaa Cref 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 Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Tiaa Cref.

Diversification Opportunities for John Hancock and Tiaa Cref

0.81

Correlation Coefficient

John Hancock  Tiaa Cref

Very poor diversification

The 3 months correlation between John and Tiaa is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Tiaa Cref Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Mid 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Mid has no effect on the direction of John Hancock i.e., John Hancock and Tiaa Cref go up and down completely randomly.

Pair Corralation between John Hancock and Tiaa Cref

Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.27 times more return on investment than Tiaa Cref. However, John Hancock is 1.27 times more volatile than Tiaa Cref Mid Cap Value. It trades about 0.17 of its potential returns per unit of risk. Tiaa Cref Mid Cap Value is currently generating about 0.0 per unit of risk. If you would invest  3,233  in John Hancock Financial on September 14, 2024 and sell it today you would earn a total of  529.00  from holding John Hancock Financial or generate 16.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

John Hancock Financial  vs.  Tiaa Cref Mid Cap Value

John Hancock Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Financial are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very conflicting basic indicators, John Hancock displayed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa Cref Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with John Hancock and Tiaa Cref

The main advantage of trading using opposite John Hancock and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Tiaa Cref 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 Tiaa Cref will offset losses from the drop in Tiaa Cref's long position.

The idea behind John Hancock Financial and Tiaa Cref Mid Cap Value 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.