Correlation Between John Hancock and Neuberger Berman

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

By analyzing existing cross correlation between John Hancock Hedged and Neuberger Berman High, you can compare the effects of market volatilities on John Hancock and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Neuberger Berman.

Diversification Opportunities for John Hancock and Neuberger Berman

0.32

Correlation Coefficient

John Hancock  Neuberger Berman

Weak diversification

The 3 months correlation between John and Neuberger is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Hedged and Neuberger Berman High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman High 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 Hedged are associated (or correlated) with Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman High has no effect on the direction of John Hancock i.e., John Hancock and Neuberger Berman go up and down completely randomly.

Pair Corralation between John Hancock and Neuberger Berman

Considering the 90-day investment horizon John Hancock is expected to generate 1.52 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, John Hancock Hedged is 1.11 times less risky than Neuberger Berman. It trades about 0.02 of its potential returns per unit of risk. Neuberger Berman High is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  681.00  in Neuberger Berman High on August 29, 2024 and sell it today you would earn a total of  93.00  from holding Neuberger Berman High or generate 13.66% return on investment over 90 days.

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

John Hancock Hedged  vs.  Neuberger Berman High

John Hancock Hedged

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Hedged are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, John Hancock is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Neuberger Berman High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman High has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical indicators, Neuberger Berman 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 John Hancock and Neuberger Berman

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

The idea behind John Hancock Hedged and Neuberger Berman High 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.