Correlation Between John Hancock and REDV

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Can any of the company-specific risk be diversified away by investing in both John Hancock and REDV 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 REDV 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 REDV, you can compare the effects of market volatilities on John Hancock and REDV 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 REDV. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and REDV.

Diversification Opportunities for John Hancock and REDV

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between John and REDV is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and REDV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDV 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 REDV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDV has no effect on the direction of John Hancock i.e., John Hancock and REDV go up and down completely randomly.

Pair Corralation between John Hancock and REDV

If you would invest  2,561  in John Hancock Multifactor on December 29, 2023 and sell it today you would earn a total of  32.00  from holding John Hancock Multifactor or generate 1.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

John Hancock Multifactor  vs.  REDV

 Performance 
       Timeline  
John Hancock Multifactor 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, John Hancock is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
REDV 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days REDV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, REDV is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

John Hancock and REDV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with John Hancock and REDV

The main advantage of trading using opposite John Hancock and REDV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, REDV 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 REDV will offset losses from the drop in REDV's long position.
The idea behind John Hancock Multifactor and REDV 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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