Correlation Between Palantir TechnologiesInc and John Hancock

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

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

Diversification Opportunities for Palantir TechnologiesInc and John Hancock

0.4

Correlation Coefficient

Palantir TechnologiesInc  John Hancock

Very weak diversification

The 3 months correlation between Palantir and John is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Palantir TechnologiesInc and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Palantir TechnologiesInc 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 Palantir TechnologiesInc 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 Disciplined has no effect on the direction of Palantir TechnologiesInc i.e., Palantir TechnologiesInc and John Hancock go up and down completely randomly.

Pair Corralation between Palantir TechnologiesInc and John Hancock

Given the investment horizon of 90 days Palantir TechnologiesInc is expected to under-perform the John Hancock. In addition to that, Palantir TechnologiesInc is 3.18 times more volatile than John Hancock Disciplined. It trades about -0.26 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about -0.15 per unit of volatility. If you would invest  1,534  in John Hancock Disciplined on January 24, 2024 and sell it today you would lose (34.00) from holding John Hancock Disciplined or give up 2.22% of portfolio value over 90 days.

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

Palantir TechnologiesInc  vs.  John Hancock Disciplined

Palantir TechnologiesInc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir TechnologiesInc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Palantir TechnologiesInc reported solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Disciplined

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Disciplined are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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 Palantir TechnologiesInc and John Hancock

The main advantage of trading using opposite Palantir TechnologiesInc and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir TechnologiesInc 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 Palantir TechnologiesInc and John Hancock Disciplined 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.