Correlation Between Innovator Growth and John Hancock

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

By analyzing existing cross correlation between Innovator Growth 100 Accelerated and John Hancock Exchange Traded, you can compare the effects of market volatilities on Innovator Growth 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 Innovator Growth with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Growth and John Hancock.

Diversification Opportunities for Innovator Growth and John Hancock

-0.71

Correlation Coefficient

Innovator Growth  John Hancock

Pay attention - limited upside

The 3 months correlation between Innovator and John is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Growth 100 Accelerat and John Hancock Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Exchange and Innovator Growth 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 Innovator Growth 100 Accelerated 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 Exchange has no effect on the direction of Innovator Growth i.e., Innovator Growth and John Hancock go up and down completely randomly.

Pair Corralation between Innovator Growth and John Hancock

Given the investment horizon of 90 days Innovator Growth 100 Accelerated is expected to generate 1.94 times more return on investment than John Hancock. However, Innovator Growth is 1.94 times more volatile than John Hancock Exchange Traded. It trades about 0.22 of its potential returns per unit of risk. John Hancock Exchange Traded is currently generating about -0.04 per unit of risk. If you would invest  3,430  in Innovator Growth 100 Accelerated on September 4, 2024 and sell it today you would earn a total of  323.00  from holding Innovator Growth 100 Accelerated or generate 9.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Innovator Growth 100 Accelerat  vs.  John Hancock Exchange Traded

Innovator Growth 100

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Growth 100 Accelerated are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innovator Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

John Hancock Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary 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 Innovator Growth and John Hancock

The main advantage of trading using opposite Innovator Growth and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Growth 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 Innovator Growth 100 Accelerated and John Hancock Exchange Traded 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.