Correlation Between John Hancock and Rbc Enterprise

Can any of the company-specific risk be diversified away by investing in both John Hancock and Rbc Enterprise 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 Rbc Enterprise 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 Rbc Enterprise Fund, you can compare the effects of market volatilities on John Hancock and Rbc Enterprise 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 Rbc Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Rbc Enterprise.

Diversification Opportunities for John Hancock and Rbc Enterprise

0.77

Correlation Coefficient

John Hancock  Rbc Enterprise

Poor diversification

The 3 months correlation between John and Rbc is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Rbc Enterprise Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Enterprise 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 Rbc Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Enterprise has no effect on the direction of John Hancock i.e., John Hancock and Rbc Enterprise go up and down completely randomly.

Pair Corralation between John Hancock and Rbc Enterprise

Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.12 times more return on investment than Rbc Enterprise. However, John Hancock is 1.12 times more volatile than Rbc Enterprise Fund. It trades about 0.22 of its potential returns per unit of risk. Rbc Enterprise Fund is currently generating about 0.11 per unit of risk. If you would invest  3,208  in John Hancock Financial on September 5, 2024 and sell it today you would earn a total of  713.00  from holding John Hancock Financial or generate 22.23% return on investment over 90 days.

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

John Hancock Financial  vs.  Rbc Enterprise Fund

John Hancock Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Financial are ranked lower than 17 (%) 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.

Rbc Enterprise

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Enterprise Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Rbc Enterprise may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with John Hancock and Rbc Enterprise

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

The idea behind John Hancock Financial and Rbc Enterprise Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.