Correlation Between Salesforce and John Hancock

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

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

Diversification Opportunities for Salesforce and John Hancock

0.43

Correlation Coefficient

Salesforce  John Hancock

Very weak diversification

The 3 months correlation between Salesforce and John is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg and Salesforce 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 Salesforce 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 Esg has no effect on the direction of Salesforce i.e., Salesforce and John Hancock go up and down completely randomly.

Pair Corralation between Salesforce and John Hancock

Considering the 90-day investment horizon Salesforce is expected to under-perform the John Hancock. In addition to that, Salesforce is 7.55 times more volatile than John Hancock Esg. It trades about -0.23 of its total potential returns per unit of risk. John Hancock Esg is currently generating about -0.21 per unit of volatility. If you would invest  913.00  in John Hancock Esg on January 26, 2024 and sell it today you would lose (11.00) from holding John Hancock Esg or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Salesforce  vs.  John Hancock Esg

Salesforce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

John Hancock Esg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Esg 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 Salesforce and John Hancock

The main advantage of trading using opposite Salesforce and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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 Salesforce and John Hancock Esg 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.