Correlation Between John Hancock and Dividend Performers

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

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

Diversification Opportunities for John Hancock and Dividend Performers

0.47

Correlation Coefficient

John Hancock  Dividend Performers

Very weak diversification

The 3 months correlation between John and Dividend is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Dividend Performers ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Performers ETF 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 Preferred are associated (or correlated) with Dividend Performers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Performers ETF has no effect on the direction of John Hancock i.e., John Hancock and Dividend Performers go up and down completely randomly.

Pair Corralation between John Hancock and Dividend Performers

Given the investment horizon of 90 days John Hancock is expected to generate 16.21 times less return on investment than Dividend Performers. But when comparing it to its historical volatility, John Hancock Preferred is 3.35 times less risky than Dividend Performers. It trades about 0.02 of its potential returns per unit of risk. Dividend Performers ETF is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,919  in Dividend Performers ETF on September 15, 2024 and sell it today you would earn a total of  112.00  from holding Dividend Performers ETF or generate 5.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

John Hancock Preferred  vs.  Dividend Performers ETF

John Hancock Preferred

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Preferred are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Dividend Performers ETF

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend Performers ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Dividend Performers is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with John Hancock and Dividend Performers

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

The idea behind John Hancock Preferred and Dividend Performers ETF 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.