Correlation Between Siit Large and John Hancock

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

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

Diversification Opportunities for Siit Large and John Hancock

0.93

Correlation Coefficient

Siit Large  John Hancock

Almost no diversification

The 3 months correlation between Siit and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap 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 Siit Large 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 Siit Large Cap 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 Siit Large i.e., Siit Large and John Hancock go up and down completely randomly.

Pair Corralation between Siit Large and John Hancock

Assuming the 90 days horizon Siit Large Cap is expected to under-perform the John Hancock. But the mutual fund apears to be less risky and, when comparing its historical volatility, Siit Large Cap is 1.49 times less risky than John Hancock. The mutual fund trades about -0.05 of its potential returns per unit of risk. The John Hancock Financial is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,487  in John Hancock Financial on December 27, 2024 and sell it today you would lose (64.00) from holding John Hancock Financial or give up 1.84% of portfolio value over 90 days.

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

Siit Large Cap  vs.  John Hancock Financial

Siit Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siit Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Siit Large 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

Very Weak

Over the last 90 days John Hancock Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, John Hancock is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Siit Large and John Hancock

The main advantage of trading using opposite Siit Large and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large 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 Siit Large Cap 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.