Correlation Between John Hancock and Home Depot
Can any of the company-specific risk be diversified away by investing in both John Hancock and Home Depot 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 Home Depot 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 Home Depot, you can compare the effects of market volatilities on John Hancock and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Home Depot.
Diversification Opportunities for John Hancock and Home Depot
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Home is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax Advantaged and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of John Hancock i.e., John Hancock and Home Depot go up and down completely randomly.
Pair Corralation between John Hancock and Home Depot
Considering the 90-day investment horizon John Hancock is expected to generate 2.07 times less return on investment than Home Depot. But when comparing it to its historical volatility, John Hancock Tax Advantaged is 1.32 times less risky than Home Depot. It trades about 0.02 of its potential returns per unit of risk. Home Depot is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 27,933 in Home Depot on January 26, 2024 and sell it today you would earn a total of 5,368 from holding Home Depot or generate 19.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.39% |
Values | Daily Returns |
John Hancock Tax Advantaged vs. Home Depot
Performance |
Timeline |
John Hancock Tax |
Home Depot |
John Hancock and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Home Depot
The main advantage of trading using opposite John Hancock and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot'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 |
Home Depot vs. Floor Decor Holdings | Home Depot vs. LL Flooring Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |