Correlation Between John Hancock and BlackRock
Can any of the company-specific risk be diversified away by investing in both John Hancock and BlackRock 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 BlackRock 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 BlackRock, you can compare the effects of market volatilities on John Hancock and BlackRock 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 BlackRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and BlackRock.
Diversification Opportunities for John Hancock and BlackRock
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and BlackRock is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax Advantaged and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of John Hancock i.e., John Hancock and BlackRock go up and down completely randomly.
Pair Corralation between John Hancock and BlackRock
Considering the 90-day investment horizon John Hancock Tax Advantaged is expected to generate 0.5 times more return on investment than BlackRock. However, John Hancock Tax Advantaged is 1.98 times less risky than BlackRock. It trades about -0.2 of its potential returns per unit of risk. BlackRock is currently generating about -0.28 per unit of risk. If you would invest 515.00 in John Hancock Tax Advantaged on January 20, 2024 and sell it today you would lose (16.00) from holding John Hancock Tax Advantaged or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Tax Advantaged vs. BlackRock
Performance |
| Timeline |
| John Hancock Tax |
| BlackRock |
John Hancock and BlackRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and BlackRock
The main advantage of trading using opposite John Hancock and BlackRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, BlackRock 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 BlackRock will offset losses from the drop in BlackRock's long position.| John Hancock vs. Virtus Global Multi | John Hancock vs. Brandywineglobal Globalome Opportunities | John Hancock vs. RiverNorth Specialty Finance | John Hancock vs. Western Asset Mortgage |
| BlackRock vs. KKR Co LP | BlackRock vs. Apollo Global Management | BlackRock vs. Brookfield Asset Management | BlackRock vs. Carlyle Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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