Correlation Between John Hancock and EMEM
Can any of the company-specific risk be diversified away by investing in both John Hancock and EMEM 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 EMEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Multifactor and EMEM, you can compare the effects of market volatilities on John Hancock and EMEM 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 EMEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and EMEM.
Diversification Opportunities for John Hancock and EMEM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and EMEM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and EMEM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMEM 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 Multifactor are associated (or correlated) with EMEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMEM has no effect on the direction of John Hancock i.e., John Hancock and EMEM go up and down completely randomly.
Pair Corralation between John Hancock and EMEM
If you would invest 2,348 in John Hancock Multifactor on January 26, 2024 and sell it today you would earn a total of 217.00 from holding John Hancock Multifactor or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
John Hancock Multifactor vs. EMEM
Performance |
| Timeline |
| John Hancock Multifactor |
| EMEM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
John Hancock and EMEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and EMEM
The main advantage of trading using opposite John Hancock and EMEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, EMEM 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 EMEM will offset losses from the drop in EMEM's long position.The idea behind John Hancock Multifactor and EMEM 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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