Correlation Between John Hancock and Crm Mid

Can any of the company-specific risk be diversified away by investing in both John Hancock and Crm Mid 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 Crm Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between John Hancock Global and Crm Mid Cap, you can compare the effects of market volatilities on John Hancock and Crm Mid 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 Crm Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Crm Mid.

Diversification Opportunities for John Hancock and Crm Mid

0.18

Correlation Coefficient

John Hancock  Crm Mid

Average diversification

The 3 months correlation between John and Crm is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Global and Crm Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crm Mid Cap 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 Global are associated (or correlated) with Crm Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crm Mid Cap has no effect on the direction of John Hancock i.e., John Hancock and Crm Mid go up and down completely randomly.

Pair Corralation between John Hancock and Crm Mid

Assuming the 90 days horizon John Hancock Global is expected to generate 0.36 times more return on investment than Crm Mid. However, John Hancock Global is 2.77 times less risky than Crm Mid. It trades about -0.01 of its potential returns per unit of risk. Crm Mid Cap is currently generating about -0.07 per unit of risk. If you would invest  1,248  in John Hancock Global on September 17, 2024 and sell it today you would lose (6.00) from holding John Hancock Global or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

John Hancock Global  vs.  Crm Mid Cap

John Hancock Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Crm Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crm Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Crm Mid 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 Crm Mid

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

The idea behind John Hancock Global and Crm Mid Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.