Correlation Between John Hancock and Jpmorgan Value

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

Diversification Opportunities for John Hancock and Jpmorgan Value

-0.67

Correlation Coefficient

John Hancock  Jpmorgan Value

Excellent diversification

The 3 months correlation between John and Jpmorgan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Jpmorgan Value Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Value Advantage 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Value Advantage has no effect on the direction of John Hancock i.e., John Hancock and Jpmorgan Value go up and down completely randomly.

Pair Corralation between John Hancock and Jpmorgan Value

Assuming the 90 days horizon John Hancock Bond is expected to under-perform the Jpmorgan Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, John Hancock Bond is 2.46 times less risky than Jpmorgan Value. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Jpmorgan Value Advantage is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,089  in Jpmorgan Value Advantage on September 4, 2024 and sell it today you would earn a total of  306.00  from holding Jpmorgan Value Advantage or generate 7.48% return on investment over 90 days.

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

John Hancock Bond  vs.  Jpmorgan Value Advantage

John Hancock Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Bond 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.

Jpmorgan Value Advantage

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Value Advantage are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with John Hancock and Jpmorgan Value

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

The idea behind John Hancock Bond and Jpmorgan Value Advantage 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.