Correlation Between John Hancock and Alliancebernstein

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

Diversification Opportunities for John Hancock and Alliancebernstein

0.62

Correlation Coefficient

John Hancock  Alliancebernstein

Poor diversification

The 3 months correlation between John and Alliancebernstein is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of John Hancock i.e., John Hancock and Alliancebernstein go up and down completely randomly.

Pair Corralation between John Hancock and Alliancebernstein

Considering the 90-day investment horizon John Hancock Preferred is expected to under-perform the Alliancebernstein. In addition to that, John Hancock is 1.95 times more volatile than Alliancebernstein Global High. It trades about -0.13 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.02 per unit of volatility. If you would invest  1,088  in Alliancebernstein Global High on September 13, 2024 and sell it today you would lose (5.00) from holding Alliancebernstein Global High or give up 0.46% of portfolio value over 90 days.

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

John Hancock Preferred  vs.  Alliancebernstein Global High

John Hancock Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, John Hancock is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with John Hancock and Alliancebernstein

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

The idea behind John Hancock Preferred and Alliancebernstein Global High 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.