Correlation Between Pfizer and John Hancock

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

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

Diversification Opportunities for Pfizer and John Hancock

-0.7

Correlation Coefficient

Pfizer  John Hancock

Excellent diversification

The 3 months correlation between Pfizer and John is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and John Hancock Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Trust and Pfizer 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 Pfizer Inc 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 Trust has no effect on the direction of Pfizer i.e., Pfizer and John Hancock go up and down completely randomly.

Pair Corralation between Pfizer and John Hancock

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the John Hancock. In addition to that, Pfizer is 1.23 times more volatile than John Hancock Trust. It trades about -0.07 of its total potential returns per unit of risk. John Hancock Trust is currently generating about 0.05 per unit of volatility. If you would invest  422.00  in John Hancock Trust on September 24, 2024 and sell it today you would earn a total of  135.00  from holding John Hancock Trust or generate 31.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Pfizer Inc  vs.  John Hancock Trust

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

John Hancock Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Trust has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Pfizer and John Hancock

The main advantage of trading using opposite Pfizer and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer 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 Pfizer Inc and John Hancock Trust 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.