Correlation Between Jpmorgan Equity and John Hancock

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

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

Diversification Opportunities for Jpmorgan Equity and John Hancock

-0.44

Correlation Coefficient

Jpmorgan Equity  John Hancock

Very good diversification

The 3 months correlation between Jpmorgan and John is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Income and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond and Jpmorgan Equity 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 Jpmorgan Equity Income 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 Bond has no effect on the direction of Jpmorgan Equity i.e., Jpmorgan Equity and John Hancock go up and down completely randomly.

Pair Corralation between Jpmorgan Equity and John Hancock

Assuming the 90 days horizon Jpmorgan Equity Income is expected to generate 1.81 times more return on investment than John Hancock. However, Jpmorgan Equity is 1.81 times more volatile than John Hancock Bond. It trades about 0.04 of its potential returns per unit of risk. John Hancock Bond is currently generating about 0.05 per unit of risk. If you would invest  2,158  in Jpmorgan Equity Income on September 18, 2024 and sell it today you would earn a total of  318.00  from holding Jpmorgan Equity Income or generate 14.74% return on investment over 90 days.

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

Jpmorgan Equity Income  vs.  John Hancock Bond

Jpmorgan Equity Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Equity Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Jpmorgan Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward 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 Jpmorgan Equity and John Hancock

The main advantage of trading using opposite Jpmorgan Equity and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity 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 Jpmorgan Equity Income and John Hancock Bond 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.