Correlation Between John Hancock and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both John Hancock and Lgm Risk 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 Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Emerging and Lgm Risk Managed, you can compare the effects of market volatilities on John Hancock and Lgm Risk 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 Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Lgm Risk.
Diversification Opportunities for John Hancock and Lgm Risk
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Lgm is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Emerging and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed 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 Emerging are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of John Hancock i.e., John Hancock and Lgm Risk go up and down completely randomly.
Pair Corralation between John Hancock and Lgm Risk
Assuming the 90 days horizon John Hancock Emerging is expected to generate 3.07 times more return on investment than Lgm Risk. However, John Hancock is 3.07 times more volatile than Lgm Risk Managed. It trades about 0.02 of its potential returns per unit of risk. Lgm Risk Managed is currently generating about -0.04 per unit of risk. If you would invest 954.00 in John Hancock Emerging on December 18, 2024 and sell it today you would earn a total of 11.00 from holding John Hancock Emerging or generate 1.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Emerging vs. Lgm Risk Managed
Performance |
Timeline |
John Hancock Emerging |
Lgm Risk Managed |
John Hancock and Lgm Risk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Lgm Risk
The main advantage of trading using opposite John Hancock and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.John Hancock vs. American Funds Inflation | John Hancock vs. Cref Inflation Linked Bond | John Hancock vs. Federated Hermes Inflation | John Hancock vs. Tiaa Cref Inflation Link |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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