Correlation Between John Hancock and Ppm High

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Can any of the company-specific risk be diversified away by investing in both John Hancock and Ppm 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 Ppm 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 Ppm High Yield, you can compare the effects of market volatilities on John Hancock and Ppm 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 Ppm High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ppm High.

Diversification Opportunities for John Hancock and Ppm High

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between John and Ppm is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Ppm High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ppm High Yield 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 Ppm High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ppm High Yield has no effect on the direction of John Hancock i.e., John Hancock and Ppm High go up and down completely randomly.

Pair Corralation between John Hancock and Ppm High

Assuming the 90 days horizon John Hancock Ii is expected to under-perform the Ppm High. In addition to that, John Hancock is 7.41 times more volatile than Ppm High Yield. It trades about -0.26 of its total potential returns per unit of risk. Ppm High Yield is currently generating about -0.17 per unit of volatility. If you would invest  899.00  in Ppm High Yield on September 22, 2024 and sell it today you would lose (5.00) from holding Ppm High Yield or give up 0.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

John Hancock Ii  vs.  Ppm High Yield

 Performance 
       Timeline  
John Hancock Ii 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days John Hancock Ii 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.
Ppm High Yield 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ppm High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ppm High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock and Ppm High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with John Hancock and Ppm High

The main advantage of trading using opposite John Hancock and Ppm High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ppm 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 Ppm High will offset losses from the drop in Ppm High's long position.
The idea behind John Hancock Ii and Ppm High Yield 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.
Check out your portfolio center.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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