Correlation Between J Hancock and Floating Rate

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

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

Diversification Opportunities for J Hancock and Floating Rate

0.17

Correlation Coefficient

J Hancock  Floating Rate

Average diversification

The 3 months correlation between JRODX and Floating is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding J Hancock Ii and Floating Rate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate Income and J 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 J Hancock Ii are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate Income has no effect on the direction of J Hancock i.e., J Hancock and Floating Rate go up and down completely randomly.

Pair Corralation between J Hancock and Floating Rate

Assuming the 90 days horizon J Hancock Ii is expected to generate 4.06 times more return on investment than Floating Rate. However, J Hancock is 4.06 times more volatile than Floating Rate Income. It trades about 0.09 of its potential returns per unit of risk. Floating Rate Income is currently generating about 0.22 per unit of risk. If you would invest  1,186  in J Hancock Ii on December 5, 2024 and sell it today you would earn a total of  412.00  from holding J Hancock Ii or generate 34.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

J Hancock Ii  vs.  Floating Rate Income

J Hancock Ii

Risk-Adjusted Performance

Very Weak

Over the last 90 days J Hancock Ii has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, J Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Floating Rate Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Floating Rate Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Floating Rate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with J Hancock and Floating Rate

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

The idea behind J Hancock Ii and Floating Rate Income 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.