Correlation Between Wrapped Bitcoin and John Hancock

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

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

Diversification Opportunities for Wrapped Bitcoin and John Hancock

0.89

Correlation Coefficient

Wrapped Bitcoin  John Hancock

Very poor diversification

The 3 months correlation between Wrapped and John is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin 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 Wrapped Bitcoin 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 Wrapped Bitcoin 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 Wrapped Bitcoin i.e., Wrapped Bitcoin and John Hancock go up and down completely randomly.

Pair Corralation between Wrapped Bitcoin and John Hancock

Assuming the 90 days trading horizon Wrapped Bitcoin is expected to under-perform the John Hancock. In addition to that, Wrapped Bitcoin is 2.81 times more volatile than John Hancock International. It trades about -0.05 of its total potential returns per unit of risk. John Hancock International is currently generating about -0.07 per unit of volatility. If you would invest  2,495  in John Hancock International on January 31, 2024 and sell it today you would lose (34.00) from holding John Hancock International or give up 1.36% of portfolio value over 90 days.

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

Wrapped Bitcoin  vs.  John Hancock International

Wrapped Bitcoin

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wrapped Bitcoin are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Wrapped Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Interna

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock International are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Wrapped Bitcoin and John Hancock

The main advantage of trading using opposite Wrapped Bitcoin and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin 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 Wrapped Bitcoin and John Hancock International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.