Correlation Between John Hancock and Jpmorgan Core

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

By analyzing existing cross correlation between John Hancock Bond and Jpmorgan E Plus, you can compare the effects of market volatilities on John Hancock and Jpmorgan Core 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 Jpmorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Jpmorgan Core.

Diversification Opportunities for John Hancock and Jpmorgan Core

0.99

Correlation Coefficient

John Hancock  Jpmorgan Core

No risk reduction

The 3 months correlation between John and Jpmorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Jpmorgan E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Plus 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 Bond are associated (or correlated) with Jpmorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Plus has no effect on the direction of John Hancock i.e., John Hancock and Jpmorgan Core go up and down completely randomly.

Pair Corralation between John Hancock and Jpmorgan Core

Assuming the 90 days horizon John Hancock is expected to generate 1.04 times less return on investment than Jpmorgan Core. In addition to that, John Hancock is 1.11 times more volatile than Jpmorgan E Plus. It trades about 0.14 of its total potential returns per unit of risk. Jpmorgan E Plus is currently generating about 0.16 per unit of volatility. If you would invest  705.00  in Jpmorgan E Plus on December 26, 2024 and sell it today you would earn a total of  19.00  from holding Jpmorgan E Plus or generate 2.7% return on investment over 90 days.

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

John Hancock Bond  vs.  Jpmorgan E Plus

John Hancock Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Bond are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.

Jpmorgan E Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan E Plus are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Core 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 Jpmorgan Core

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

The idea behind John Hancock Bond and Jpmorgan E Plus 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.