Correlation Between John Hancock and American High

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

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

Diversification Opportunities for John Hancock and American High

0.76

Correlation Coefficient

John Hancock  American High

Poor diversification

The 3 months correlation between John and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and American High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 Ii are associated (or correlated) with American High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of John Hancock i.e., John Hancock and American High go up and down completely randomly.

Pair Corralation between John Hancock and American High

Assuming the 90 days horizon John Hancock Ii is expected to generate 6.58 times more return on investment than American High. However, John Hancock is 6.58 times more volatile than American High Income. It trades about 0.08 of its potential returns per unit of risk. American High Income is currently generating about 0.2 per unit of risk. If you would invest  1,917  in John Hancock Ii on September 15, 2024 and sell it today you would earn a total of  24.00  from holding John Hancock Ii or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

John Hancock Ii  vs.  American High Income

John Hancock Ii

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Ii are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. 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.

American High Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American High Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, American High 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 American High

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

The idea behind John Hancock Ii and American High 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.