Correlation Between John Hancock and Inverse High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Inverse High 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 Inverse High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Variable and Inverse High Yield, you can compare the effects of market volatilities on John Hancock and Inverse High 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 Inverse High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Inverse High.
Diversification Opportunities for John Hancock and Inverse High
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Inverse is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Variable and Inverse High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse High Yield 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 Variable are associated (or correlated) with Inverse High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse High Yield has no effect on the direction of John Hancock i.e., John Hancock and Inverse High go up and down completely randomly.
Pair Corralation between John Hancock and Inverse High
Assuming the 90 days horizon John Hancock Variable is expected to generate 4.54 times more return on investment than Inverse High. However, John Hancock is 4.54 times more volatile than Inverse High Yield. It trades about 0.13 of its potential returns per unit of risk. Inverse High Yield is currently generating about 0.23 per unit of risk. If you would invest 1,997 in John Hancock Variable on September 24, 2024 and sell it today you would earn a total of 75.00 from holding John Hancock Variable or generate 3.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
John Hancock Variable vs. Inverse High Yield
Performance |
Timeline |
John Hancock Variable |
Inverse High Yield |
John Hancock and Inverse High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Inverse High
The main advantage of trading using opposite John Hancock and Inverse High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Inverse High 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 Inverse High will offset losses from the drop in Inverse High's long position.John Hancock vs. Inverse High Yield | John Hancock vs. Jpmorgan High Yield | John Hancock vs. Pax High Yield | John Hancock vs. Blackrock High Yield |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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