Correlation Between John Hancock and Telecommunications

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

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

Diversification Opportunities for John Hancock and Telecommunications

0.83

Correlation Coefficient

John Hancock  Telecommunications

Very poor diversification

The 3 months correlation between John and Telecommunications is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Telecommunications Portfolio F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecommunications 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 Ii are associated (or correlated) with Telecommunications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecommunications has no effect on the direction of John Hancock i.e., John Hancock and Telecommunications go up and down completely randomly.

Pair Corralation between John Hancock and Telecommunications

Assuming the 90 days horizon John Hancock Ii is expected to generate 1.29 times more return on investment than Telecommunications. However, John Hancock is 1.29 times more volatile than Telecommunications Portfolio Fidelity. It trades about 0.03 of its potential returns per unit of risk. Telecommunications Portfolio Fidelity is currently generating about 0.03 per unit of risk. If you would invest  1,852  in John Hancock Ii on September 21, 2024 and sell it today you would earn a total of  34.00  from holding John Hancock Ii or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

John Hancock Ii  vs.  Telecommunications Portfolio F

John Hancock Ii

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Ii are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Telecommunications

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telecommunications Portfolio Fidelity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Telecommunications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Telecommunications

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

The idea behind John Hancock Ii and Telecommunications Portfolio Fidelity 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.