Correlation Between TRON and John Hancock

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

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

Diversification Opportunities for TRON and John Hancock

-0.52

Correlation Coefficient

TRON  John Hancock

Excellent diversification

The 3 months correlation between TRON and John is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TRON and John Hancock Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Emerging and TRON 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 TRON 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 Emerging has no effect on the direction of TRON i.e., TRON and John Hancock go up and down completely randomly.

Pair Corralation between TRON and John Hancock

Assuming the 90 days trading horizon TRON is expected to under-perform the John Hancock. In addition to that, TRON is 6.7 times more volatile than John Hancock Emerging. It trades about -0.11 of its total potential returns per unit of risk. John Hancock Emerging is currently generating about -0.29 per unit of volatility. If you would invest  981.00  in John Hancock Emerging on October 11, 2024 and sell it today you would lose (35.00) from holding John Hancock Emerging or give up 3.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

TRON  vs.  John Hancock Emerging

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with TRON and John Hancock

The main advantage of trading using opposite TRON and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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 TRON and John Hancock Emerging 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.