Correlation Between John Hancock and Tekla World

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

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

Diversification Opportunities for John Hancock and Tekla World

0.77

Correlation Coefficient

John Hancock  Tekla World

Poor diversification

The 3 months correlation between John and Tekla is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Tekla World Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla World Healthcare 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 Preferred are associated (or correlated) with Tekla World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla World Healthcare has no effect on the direction of John Hancock i.e., John Hancock and Tekla World go up and down completely randomly.

Pair Corralation between John Hancock and Tekla World

Considering the 90-day investment horizon John Hancock is expected to generate 1.91 times less return on investment than Tekla World. In addition to that, John Hancock is 1.12 times more volatile than Tekla World Healthcare. It trades about 0.1 of its total potential returns per unit of risk. Tekla World Healthcare is currently generating about 0.2 per unit of volatility. If you would invest  1,083  in Tekla World Healthcare on December 23, 2024 and sell it today you would earn a total of  106.00  from holding Tekla World Healthcare or generate 9.79% return on investment over 90 days.

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

John Hancock Preferred  vs.  Tekla World Healthcare

John Hancock Preferred

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Preferred are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Tekla World Healthcare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla World Healthcare are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly inconsistent technical indicators, Tekla World may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with John Hancock and Tekla World

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

The idea behind John Hancock Preferred and Tekla World Healthcare 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.