Correlation Between John Hancock and Calamos Timpani

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

By analyzing existing cross correlation between John Hancock Financial and Calamos Timpani Small, you can compare the effects of market volatilities on John Hancock and Calamos Timpani 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 Calamos Timpani. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Calamos Timpani.

Diversification Opportunities for John Hancock and Calamos Timpani

0.96

Correlation Coefficient

John Hancock  Calamos Timpani

Almost no diversification

The 3 months correlation between John and Calamos is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Calamos Timpani Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Timpani Small 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 Financial are associated (or correlated) with Calamos Timpani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Timpani Small has no effect on the direction of John Hancock i.e., John Hancock and Calamos Timpani go up and down completely randomly.

Pair Corralation between John Hancock and Calamos Timpani

Considering the 90-day investment horizon John Hancock Financial is expected to generate 0.95 times more return on investment than Calamos Timpani. However, John Hancock Financial is 1.05 times less risky than Calamos Timpani. It trades about 0.21 of its potential returns per unit of risk. Calamos Timpani Small is currently generating about 0.19 per unit of risk. If you would invest  3,208  in John Hancock Financial on September 13, 2024 and sell it today you would earn a total of  647.00  from holding John Hancock Financial or generate 20.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

John Hancock Financial  vs.  Calamos Timpani Small

John Hancock Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Financial are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of very conflicting basic indicators, John Hancock displayed solid returns over the last few months and may actually be approaching a breakup point.

Calamos Timpani Small

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Timpani Small are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Calamos Timpani showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with John Hancock and Calamos Timpani

The main advantage of trading using opposite John Hancock and Calamos Timpani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Calamos Timpani 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 Calamos Timpani will offset losses from the drop in Calamos Timpani's long position.

The idea behind John Hancock Financial and Calamos Timpani Small 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.