Correlation Between John Hancock and Platinum Asia

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

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

Diversification Opportunities for John Hancock and Platinum Asia

0.1

Correlation Coefficient

John Hancock  Platinum Asia

Average diversification

The 3 months correlation between John and Platinum is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investors and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Investors are associated (or correlated) with Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of John Hancock i.e., John Hancock and Platinum Asia go up and down completely randomly.

Pair Corralation between John Hancock and Platinum Asia

Considering the 90-day investment horizon John Hancock is expected to generate 3.91 times less return on investment than Platinum Asia. But when comparing it to its historical volatility, John Hancock Investors is 2.24 times less risky than Platinum Asia. It trades about 0.06 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,231  in Platinum Asia Investments on December 28, 2024 and sell it today you would earn a total of  54.00  from holding Platinum Asia Investments or generate 4.39% return on investment over 90 days.

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

John Hancock Investors  vs.  Platinum Asia Investments

John Hancock Investors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Investors are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, John Hancock is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Platinum Asia Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia Investments are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with John Hancock and Platinum Asia

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

The idea behind John Hancock Investors and Platinum Asia Investments 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.

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 CEOs Directory module to screen CEOs from public companies around the world.