Correlation Between John Hancock and Northern Trust
Can any of the company-specific risk be diversified away by investing in both John Hancock and Northern Trust 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 Northern Trust 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 Northern Trust, you can compare the effects of market volatilities on John Hancock and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Northern Trust.
Diversification Opportunities for John Hancock and Northern Trust
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Northern is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax Advantaged and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of John Hancock i.e., John Hancock and Northern Trust go up and down completely randomly.
Pair Corralation between John Hancock and Northern Trust
Considering the 90-day investment horizon John Hancock Tax Advantaged is expected to generate 0.58 times more return on investment than Northern Trust. However, John Hancock Tax Advantaged is 1.72 times less risky than Northern Trust. It trades about 0.01 of its potential returns per unit of risk. Northern Trust is currently generating about -0.01 per unit of risk. If you would invest 480.00 in John Hancock Tax Advantaged on January 24, 2024 and sell it today you would earn a total of 19.00 from holding John Hancock Tax Advantaged or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
John Hancock Tax Advantaged vs. Northern Trust
Performance |
| Timeline |
| John Hancock Tax |
| Northern Trust |
John Hancock and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Northern Trust
The main advantage of trading using opposite John Hancock and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust'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 |
| Northern Trust vs. Bank of New | Northern Trust vs. Invesco Plc | Northern Trust vs. Franklin Resources | Northern Trust vs. T Rowe Price |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |