Correlation Between John Hancock and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both John Hancock and Brookfield Asset 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 Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Tax Advantaged and Brookfield Asset Management, you can compare the effects of market volatilities on John Hancock and Brookfield Asset 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 Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Brookfield Asset.
Diversification Opportunities for John Hancock and Brookfield Asset
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Brookfield is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax-Advantaged and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Tax Advantaged are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of John Hancock i.e., John Hancock and Brookfield Asset go up and down completely randomly.
Pair Corralation between John Hancock and Brookfield Asset
Considering the 90-day investment horizon John Hancock Tax Advantaged is expected to generate 0.52 times more return on investment than Brookfield Asset. However, John Hancock Tax Advantaged is 1.93 times less risky than Brookfield Asset. It trades about 0.36 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.15 per unit of risk. If you would invest 498.00 in John Hancock Tax Advantaged on December 30, 2023 and sell it today you would earn a total of 26.00 from holding John Hancock Tax Advantaged or generate 5.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Tax-Advantaged vs. Brookfield Asset Management
Performance |
Timeline |
John Hancock Tax-adv |
Brookfield Asset Man |
John Hancock and Brookfield Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Brookfield Asset
The main advantage of trading using opposite John Hancock and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset's long position.John Hancock vs. Liberty All Star | John Hancock vs. Morgan Stanley India | John Hancock vs. Blackrock Enhanced Capital | John Hancock vs. India Closed |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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