Correlation Between John Hancock and Gabelli Multimedia

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

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

Diversification Opportunities for John Hancock and Gabelli Multimedia

0.46

Correlation Coefficient

John Hancock  Gabelli Multimedia

Very weak diversification

The 3 months correlation between John and Gabelli is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and The Gabelli Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Gabelli Multimedia 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 Income are associated (or correlated) with Gabelli Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Gabelli Multimedia has no effect on the direction of John Hancock i.e., John Hancock and Gabelli Multimedia go up and down completely randomly.

Pair Corralation between John Hancock and Gabelli Multimedia

Considering the 90-day investment horizon John Hancock Income is expected to generate 0.59 times more return on investment than Gabelli Multimedia. However, John Hancock Income is 1.7 times less risky than Gabelli Multimedia. It trades about 0.04 of its potential returns per unit of risk. The Gabelli Multimedia is currently generating about -0.02 per unit of risk. If you would invest  1,156  in John Hancock Income on September 12, 2024 and sell it today you would earn a total of  12.00  from holding John Hancock Income or generate 1.04% return on investment over 90 days.

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

John Hancock Income  vs.  The Gabelli Multimedia

John Hancock Income

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Income are ranked lower than 3 (%) 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.

The Gabelli Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Multimedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gabelli Multimedia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with John Hancock and Gabelli Multimedia

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

The idea behind John Hancock Income and The Gabelli Multimedia 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.