Correlation Between GM and John Hancock
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and John Hancock Strategic, you can compare the effects of market volatilities on GM 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 GM with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and John Hancock.
Diversification Opportunities for GM and John Hancock
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and John Hancock Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Strategic and GM 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 General Motors 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 Strategic has no effect on the direction of GM i.e., GM and John Hancock go up and down completely randomly.
Pair Corralation between GM and John Hancock
Allowing for the 90-day total investment horizon GM is expected to generate 1.05 times less return on investment than John Hancock. In addition to that, GM is 2.75 times more volatile than John Hancock Strategic. It trades about 0.12 of its total potential returns per unit of risk. John Hancock Strategic is currently generating about 0.34 per unit of volatility. If you would invest 2,498 in John Hancock Strategic on May 1, 2025 and sell it today you would earn a total of 465.00 from holding John Hancock Strategic or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. John Hancock Strategic
Performance |
| Timeline |
| General Motors |
| John Hancock Strategic |
GM and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and John Hancock
The main advantage of trading using opposite GM and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors and John Hancock Strategic 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.| John Hancock vs. Artisan High Income | John Hancock vs. Mesirow Financial High | John Hancock vs. Saat Tax Managed Aggressive | John Hancock 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |