Correlation Between John Hancock and Catalyst/princeton

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

Diversification Opportunities for John Hancock and Catalyst/princeton

-0.52

Correlation Coefficient

John Hancock  Catalyst/princeton

Excellent diversification

The 3 months correlation between John and Catalyst/princeton is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Variable and Catalystprinceton Floating Rat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/princeton 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 Catalyst/princeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/princeton has no effect on the direction of John Hancock i.e., John Hancock and Catalyst/princeton go up and down completely randomly.

Pair Corralation between John Hancock and Catalyst/princeton

Assuming the 90 days horizon John Hancock is expected to generate 1.2 times less return on investment than Catalyst/princeton. In addition to that, John Hancock is 6.46 times more volatile than Catalystprinceton Floating Rate. It trades about 0.03 of its total potential returns per unit of risk. Catalystprinceton Floating Rate is currently generating about 0.2 per unit of volatility. If you would invest  781.00  in Catalystprinceton Floating Rate on October 23, 2024 and sell it today you would earn a total of  144.00  from holding Catalystprinceton Floating Rate or generate 18.44% return on investment over 90 days.

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

John Hancock Variable  vs.  Catalystprinceton Floating Rat

John Hancock Variable

Risk-Adjusted Performance

0 of 100

Very Weak

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

Catalyst/princeton

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystprinceton Floating Rate are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst/princeton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Catalyst/princeton

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

The idea behind John Hancock Variable and Catalystprinceton Floating Rate 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.