Correlation Between Eagle Mid and John Hancock

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

By analyzing existing cross correlation between Eagle Mid Cap and John Hancock Trust, you can compare the effects of market volatilities on Eagle Mid 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 Eagle Mid with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mid and John Hancock.

Diversification Opportunities for Eagle Mid and John Hancock

0.92

Correlation Coefficient

Eagle Mid  John Hancock

Almost no diversification

The 3 months correlation between Eagle and John is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mid Cap and John Hancock Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Trust and Eagle Mid 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 Eagle Mid Cap 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 Trust has no effect on the direction of Eagle Mid i.e., Eagle Mid and John Hancock go up and down completely randomly.

Pair Corralation between Eagle Mid and John Hancock

Assuming the 90 days horizon Eagle Mid is expected to generate 1.91 times less return on investment than John Hancock. In addition to that, Eagle Mid is 1.01 times more volatile than John Hancock Trust. It trades about 0.04 of its total potential returns per unit of risk. John Hancock Trust is currently generating about 0.07 per unit of volatility. If you would invest  461.00  in John Hancock Trust on September 27, 2024 and sell it today you would earn a total of  101.00  from holding John Hancock Trust or generate 21.91% return on investment over 90 days.

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

Eagle Mid Cap  vs.  John Hancock Trust

Eagle Mid Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eagle Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

John Hancock Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Trust are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eagle Mid and John Hancock

The main advantage of trading using opposite Eagle Mid and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mid 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 Eagle Mid Cap and John Hancock Trust 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.

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 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.