Correlation Between John Hancock and Cbre Clarion

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

Diversification Opportunities for John Hancock and Cbre Clarion

0.95

Correlation Coefficient

John Hancock  Cbre Clarion

Almost no diversification

The 3 months correlation between John and CBRE is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Hedged and Cbre Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cbre Clarion Global 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 Cbre Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cbre Clarion Global has no effect on the direction of John Hancock i.e., John Hancock and Cbre Clarion go up and down completely randomly.

Pair Corralation between John Hancock and Cbre Clarion

Considering the 90-day investment horizon John Hancock is expected to generate 1.71 times less return on investment than Cbre Clarion. But when comparing it to its historical volatility, John Hancock Hedged is 2.2 times less risky than Cbre Clarion. It trades about 0.04 of its potential returns per unit of risk. Cbre Clarion Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  449.00  in Cbre Clarion Global on December 2, 2024 and sell it today you would earn a total of  81.00  from holding Cbre Clarion Global or generate 18.04% return on investment over 90 days.

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

John Hancock Hedged  vs.  Cbre Clarion Global

John Hancock Hedged

Risk-Adjusted Performance

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.

Cbre Clarion Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with John Hancock and Cbre Clarion

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

The idea behind John Hancock Hedged and Cbre Clarion Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.