Correlation Between John Hancock and State Street
Can any of the company-specific risk be diversified away by investing in both John Hancock and State Street 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 State Street 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 State Street Corp, you can compare the effects of market volatilities on John Hancock and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and State Street.
Diversification Opportunities for John Hancock and State Street
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and State is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax Advantaged and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Corp 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Corp has no effect on the direction of John Hancock i.e., John Hancock and State Street go up and down completely randomly.
Pair Corralation between John Hancock and State Street
Considering the 90-day investment horizon John Hancock Tax Advantaged is expected to under-perform the State Street. But the fund apears to be less risky and, when comparing its historical volatility, John Hancock Tax Advantaged is 1.66 times less risky than State Street. The fund trades about -0.25 of its potential returns per unit of risk. The State Street Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 7,550 in State Street Corp on January 26, 2024 and sell it today you would lose (121.00) from holding State Street Corp or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
John Hancock Tax Advantaged vs. State Street Corp
Performance |
| Timeline |
| John Hancock Tax |
| State Street Corp |
John Hancock and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and State Street
The main advantage of trading using opposite John Hancock and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. Invesco Plc | State Street vs. Franklin Resources | State Street vs. T Rowe Price | State Street vs. SEI Investments |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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