Correlation Between John Hancock and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both John Hancock and Wells Fargo 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 Wells Fargo 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 Wells Fargo, you can compare the effects of market volatilities on John Hancock and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Wells Fargo.
Diversification Opportunities for John Hancock and Wells Fargo
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Wells is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax-Advantaged and Wells Fargo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo has no effect on the direction of John Hancock i.e., John Hancock and Wells Fargo go up and down completely randomly.
Pair Corralation between John Hancock and Wells Fargo
Considering the 90-day investment horizon John Hancock is expected to generate 1.16 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, John Hancock Tax Advantaged is 1.34 times less risky than Wells Fargo. It trades about 0.3 of its potential returns per unit of risk. Wells Fargo is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,481 in Wells Fargo on December 29, 2023 and sell it today you would earn a total of 280.00 from holding Wells Fargo or generate 5.11% 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. Wells Fargo
Performance |
Timeline |
John Hancock Tax-adv |
Wells Fargo |
John Hancock and Wells Fargo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Wells Fargo
The main advantage of trading using opposite John Hancock and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.John Hancock vs. Central Europe Russia | John Hancock vs. John Hancock Financial | John Hancock vs. Korea Closed | John Hancock vs. Tortoise Mlp Closed |
Wells Fargo vs. Bank Of America | Wells Fargo vs. Deckers Outdoor | Wells Fargo vs. Intuitive Machines | Wells Fargo vs. Liberty Interactive LLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
CEOs Directory Screen CEOs from public companies around the world | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |