Correlation Between John Hancock and Ridgeworth Silvant

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

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

Diversification Opportunities for John Hancock and Ridgeworth Silvant

0.24

Correlation Coefficient

John Hancock  Ridgeworth Silvant

Modest diversification

The 3 months correlation between John and Ridgeworth is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Ridgeworth Silvant Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Silvant Large 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 Investment are associated (or correlated) with Ridgeworth Silvant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Silvant Large has no effect on the direction of John Hancock i.e., John Hancock and Ridgeworth Silvant go up and down completely randomly.

Pair Corralation between John Hancock and Ridgeworth Silvant

Assuming the 90 days horizon John Hancock Investment is expected to under-perform the Ridgeworth Silvant. In addition to that, John Hancock is 1.34 times more volatile than Ridgeworth Silvant Large. It trades about -0.15 of its total potential returns per unit of risk. Ridgeworth Silvant Large is currently generating about 0.0 per unit of volatility. If you would invest  1,586  in Ridgeworth Silvant Large on November 29, 2024 and sell it today you would lose (5.00) from holding Ridgeworth Silvant Large or give up 0.32% of portfolio value over 90 days.

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

John Hancock Investment  vs.  Ridgeworth Silvant Large

John Hancock Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Investment 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 basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ridgeworth Silvant Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridgeworth Silvant Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ridgeworth Silvant 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 Ridgeworth Silvant

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

The idea behind John Hancock Investment and Ridgeworth Silvant Large 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.