Correlation Between Prudential Jennison and John Hancock
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison 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 Prudential Jennison and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison International and John Hancock International, you can compare the effects of market volatilities on Prudential Jennison 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 Prudential Jennison with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and John Hancock.
Diversification Opportunities for Prudential Jennison and John Hancock
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prudential and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Internatio and John Hancock International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Interna and Prudential Jennison 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 Prudential Jennison International 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 Interna has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and John Hancock go up and down completely randomly.
Pair Corralation between Prudential Jennison and John Hancock
Assuming the 90 days horizon Prudential Jennison International is expected to generate 1.49 times more return on investment than John Hancock. However, Prudential Jennison is 1.49 times more volatile than John Hancock International. It trades about 0.06 of its potential returns per unit of risk. John Hancock International is currently generating about 0.09 per unit of risk. If you would invest 2,896 in Prudential Jennison International on January 26, 2024 and sell it today you would earn a total of 111.00 from holding Prudential Jennison International or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Prudential Jennison Internatio vs. John Hancock International
Performance |
| Timeline |
| Prudential Jennison |
| John Hancock Interna |
Prudential Jennison and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and John Hancock
The main advantage of trading using opposite Prudential Jennison and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison 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.| Prudential Jennison vs. Prudential Jennison Global | Prudential Jennison vs. Prudential Jennison Emerging | Prudential Jennison vs. Brown Advisory Sustainable | Prudential Jennison vs. Prudential High Yield |
| John Hancock vs. Hsbc Treasury Money | John Hancock vs. Dreyfus Institutional Reserves | John Hancock vs. Edward Jones Money | John Hancock vs. Hewitt Money Market |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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