Correlation Between Aberdeen Asia-pacific and John Hancock

Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia-pacific and John Hancock 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 Aberdeen Asia-pacific and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aberdeen Asia Pacific If and John Hancock Financial, you can compare the effects of market volatilities on Aberdeen Asia-pacific and John Hancock 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 Aberdeen Asia-pacific with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia-pacific and John Hancock.

Diversification Opportunities for Aberdeen Asia-pacific and John Hancock

-0.09

Correlation Coefficient

Aberdeen Asia-pacific  John Hancock

Good diversification

The 3 months correlation between Aberdeen and John is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Aberdeen Asia-pacific 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 Aberdeen Asia Pacific If are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Financial has no effect on the direction of Aberdeen Asia-pacific i.e., Aberdeen Asia-pacific and John Hancock go up and down completely randomly.

Pair Corralation between Aberdeen Asia-pacific and John Hancock

Considering the 90-day investment horizon Aberdeen Asia Pacific If is expected to generate 0.46 times more return on investment than John Hancock. However, Aberdeen Asia Pacific If is 2.19 times less risky than John Hancock. It trades about 0.24 of its potential returns per unit of risk. John Hancock Financial is currently generating about -0.02 per unit of risk. If you would invest  1,476  in Aberdeen Asia Pacific If on December 20, 2024 and sell it today you would earn a total of  132.00  from holding Aberdeen Asia Pacific If or generate 8.94% return on investment over 90 days.

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

Aberdeen Asia Pacific If  vs.  John Hancock Financial

Aberdeen Asia Pacific

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Asia Pacific If are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Aberdeen Asia-pacific may actually be approaching a critical reversion point that can send shares even higher in April 2025.

John Hancock Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, John Hancock is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Asia-pacific and John Hancock

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

The idea behind Aberdeen Asia Pacific If and John Hancock Financial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.