Correlation Between Guggenheim Risk and John Hancock

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

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

Diversification Opportunities for Guggenheim Risk and John Hancock

0.09

Correlation Coefficient

Guggenheim Risk  John Hancock

Significant diversification

The 3 months correlation between Guggenheim and John is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and John Hancock Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investment and Guggenheim Risk 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 Guggenheim Risk Managed 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 Investment has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and John Hancock go up and down completely randomly.

Pair Corralation between Guggenheim Risk and John Hancock

Assuming the 90 days horizon Guggenheim Risk is expected to generate 2.58 times less return on investment than John Hancock. In addition to that, Guggenheim Risk is 1.08 times more volatile than John Hancock Investment. It trades about 0.04 of its total potential returns per unit of risk. John Hancock Investment is currently generating about 0.12 per unit of volatility. If you would invest  6,662  in John Hancock Investment on September 14, 2024 and sell it today you would earn a total of  1,708  from holding John Hancock Investment or generate 25.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Guggenheim Risk Managed  vs.  John Hancock Investment

Guggenheim Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Guggenheim Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Investment are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guggenheim Risk and John Hancock

The main advantage of trading using opposite Guggenheim Risk and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Risk 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 Guggenheim Risk Managed and John Hancock Investment 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.