Correlation Between John Hancock and Sterling Capital

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

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

Diversification Opportunities for John Hancock and Sterling Capital

0.0

Correlation Coefficient

John Hancock  Sterling Capital

Pay attention - limited upside

The 3 months correlation between John and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Money and Sterling Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Equity 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 Money are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Equity has no effect on the direction of John Hancock i.e., John Hancock and Sterling Capital go up and down completely randomly.

Pair Corralation between John Hancock and Sterling Capital

If you would invest  2,191  in Sterling Capital Equity on October 22, 2024 and sell it today you would earn a total of  62.00  from holding Sterling Capital Equity or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

John Hancock Money  vs.  Sterling Capital Equity

John Hancock Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Money 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.

Sterling Capital Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Capital Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with John Hancock and Sterling Capital

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

The idea behind John Hancock Money and Sterling Capital Equity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.