Correlation Between IShares 0 and John Hancock

Can any of the company-specific risk be diversified away by investing in both IShares 0 and John Hancock 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 IShares 0 and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares 0 5 Year and John Hancock Preferred, you can compare the effects of market volatilities on IShares 0 and John Hancock 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 IShares 0 with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 0 and John Hancock.

Diversification Opportunities for IShares 0 and John Hancock

-0.64

Correlation Coefficient

IShares 0  John Hancock

Excellent diversification

The 3 months correlation between IShares and John is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares 0 5 Year and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred and IShares 0 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 iShares 0 5 Year are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Preferred has no effect on the direction of IShares 0 i.e., IShares 0 and John Hancock go up and down completely randomly.

Pair Corralation between IShares 0 and John Hancock

Given the investment horizon of 90 days iShares 0 5 Year is expected to generate 0.13 times more return on investment than John Hancock. However, iShares 0 5 Year is 7.92 times less risky than John Hancock. It trades about 0.24 of its potential returns per unit of risk. John Hancock Preferred is currently generating about -0.05 per unit of risk. If you would invest  10,030  in iShares 0 5 Year on February 8, 2025 and sell it today you would earn a total of  242.00  from holding iShares 0 5 Year or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

iShares 0 5 Year  vs.  John Hancock Preferred

iShares 0 5

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares 0 5 Year are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, IShares 0 is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

John Hancock Preferred

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, John Hancock is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares 0 and John Hancock

The main advantage of trading using opposite IShares 0 and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 0 position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.

The idea behind iShares 0 5 Year and John Hancock Preferred pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.