Correlation Between Micron Technology and John Hancock

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

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

Diversification Opportunities for Micron Technology and John Hancock

0.07

Correlation Coefficient

Micron Technology  John Hancock

Significant diversification

The 3 months correlation between Micron and John is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and John Hancock Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Trust and Micron Technology 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 Micron Technology 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 Trust has no effect on the direction of Micron Technology i.e., Micron Technology and John Hancock go up and down completely randomly.

Pair Corralation between Micron Technology and John Hancock

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the John Hancock. In addition to that, Micron Technology is 4.0 times more volatile than John Hancock Trust. It trades about -0.09 of its total potential returns per unit of risk. John Hancock Trust is currently generating about -0.23 per unit of volatility. If you would invest  598.00  in John Hancock Trust on September 28, 2024 and sell it today you would lose (33.00) from holding John Hancock Trust or give up 5.52% of portfolio value over 90 days.

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

Micron Technology  vs.  John Hancock Trust

Micron Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

John Hancock Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Trust are ranked lower than 1 (%) 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.

Pair Trading with Micron Technology and John Hancock

The main advantage of trading using opposite Micron Technology and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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 Micron Technology and John Hancock Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.