Correlation Between Jpmorgan Floating and John Hancock

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

By analyzing existing cross correlation between Jpmorgan Floating Rate and John Hancock Financial, you can compare the effects of market volatilities on Jpmorgan Floating and John Hancock 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 Jpmorgan Floating with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Floating and John Hancock.

Diversification Opportunities for Jpmorgan Floating and John Hancock

0.85

Correlation Coefficient

Jpmorgan Floating  John Hancock

Very poor diversification

The 3 months correlation between Jpmorgan and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Floating Rate and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Jpmorgan Floating 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 Jpmorgan Floating Rate are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Financial has no effect on the direction of Jpmorgan Floating i.e., Jpmorgan Floating and John Hancock go up and down completely randomly.

Pair Corralation between Jpmorgan Floating and John Hancock

Assuming the 90 days horizon Jpmorgan Floating Rate is expected to generate 0.05 times more return on investment than John Hancock. However, Jpmorgan Floating Rate is 21.54 times less risky than John Hancock. It trades about 0.18 of its potential returns per unit of risk. John Hancock Financial is currently generating about -0.31 per unit of risk. If you would invest  849.00  in Jpmorgan Floating Rate on September 27, 2024 and sell it today you would earn a total of  2.00  from holding Jpmorgan Floating Rate or generate 0.24% return on investment over 90 days.

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

Jpmorgan Floating Rate  vs.  John Hancock Financial

Jpmorgan Floating Rate

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Floating Rate are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Financial are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jpmorgan Floating and John Hancock

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

The idea behind Jpmorgan Floating Rate and John Hancock Financial 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.