Correlation Between John Hancock and Voya Infrastructure

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

By analyzing existing cross correlation between John Hancock Hedged and Voya Infrastructure Industrials, you can compare the effects of market volatilities on John Hancock and Voya Infrastructure 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 Voya Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Voya Infrastructure.

Diversification Opportunities for John Hancock and Voya Infrastructure

0.09

Correlation Coefficient

John Hancock  Voya Infrastructure

Significant diversification

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

Pair Corralation between John Hancock and Voya Infrastructure

Considering the 90-day investment horizon John Hancock is expected to generate 1.35 times less return on investment than Voya Infrastructure. But when comparing it to its historical volatility, John Hancock Hedged is 1.49 times less risky than Voya Infrastructure. It trades about 0.11 of its potential returns per unit of risk. Voya Infrastructure Industrials is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Voya Infrastructure Industrials on September 14, 2024 and sell it today you would earn a total of  233.00  from holding Voya Infrastructure Industrials or generate 27.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

John Hancock Hedged  vs.  Voya Infrastructure Industrial

John Hancock Hedged

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Hedged has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, John Hancock is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Voya Infrastructure

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Infrastructure Industrials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Voya Infrastructure is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with John Hancock and Voya Infrastructure

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

The idea behind John Hancock Hedged and Voya Infrastructure Industrials 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.