Correlation Between John Hancock and Oberweis Emerging

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

Diversification Opportunities for John Hancock and Oberweis Emerging

0.5

Correlation Coefficient

John Hancock  Oberweis Emerging

Very weak diversification

The 3 months correlation between JOHN and Oberweis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Emerging and Oberweis Emerging Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Growth 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 Oberweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Emerging Growth has no effect on the direction of John Hancock i.e., John Hancock and Oberweis Emerging go up and down completely randomly.

Pair Corralation between John Hancock and Oberweis Emerging

Assuming the 90 days horizon John Hancock Emerging is expected to generate 0.74 times more return on investment than Oberweis Emerging. However, John Hancock Emerging is 1.35 times less risky than Oberweis Emerging. It trades about 0.01 of its potential returns per unit of risk. Oberweis Emerging Growth is currently generating about -0.06 per unit of risk. If you would invest  960.00  in John Hancock Emerging on December 20, 2024 and sell it today you would earn a total of  0.00  from holding John Hancock Emerging or generate 0.0% return on investment over 90 days.

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

John Hancock Emerging  vs.  Oberweis Emerging Growth

John Hancock Emerging

Risk-Adjusted Performance

Weak

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

Oberweis Emerging Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oberweis Emerging Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Oberweis Emerging 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 Oberweis Emerging

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

The idea behind John Hancock Emerging and Oberweis Emerging Growth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.