Correlation Between Tortoise Energy and John Hancock

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

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

Diversification Opportunities for Tortoise Energy and John Hancock

-0.26

Correlation Coefficient

Tortoise Energy  John Hancock

Very good diversification

The 3 months correlation between Tortoise and John is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tortoise Energy Infrastructure and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Tortoise Energy 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 Tortoise Energy Infrastructure 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 Income has no effect on the direction of Tortoise Energy i.e., Tortoise Energy and John Hancock go up and down completely randomly.

Pair Corralation between Tortoise Energy and John Hancock

Considering the 90-day investment horizon Tortoise Energy Infrastructure is expected to generate 1.94 times more return on investment than John Hancock. However, Tortoise Energy is 1.94 times more volatile than John Hancock Income. It trades about 0.14 of its potential returns per unit of risk. John Hancock Income is currently generating about 0.07 per unit of risk. If you would invest  2,661  in Tortoise Energy Infrastructure on September 12, 2024 and sell it today you would earn a total of  1,709  from holding Tortoise Energy Infrastructure or generate 64.22% return on investment over 90 days.

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

Tortoise Energy Infrastructure  vs.  John Hancock Income

Tortoise Energy Infr

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Energy Infrastructure are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tortoise Energy reported solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, John Hancock is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tortoise Energy and John Hancock

The main advantage of trading using opposite Tortoise Energy and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tortoise Energy 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 Tortoise Energy Infrastructure and John Hancock 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.