Correlation Between John Hancock and Picc Prop

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Can any of the company-specific risk be diversified away by investing in both John Hancock and Picc Prop 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 Picc Prop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Funds and Picc Prop Casualty, you can compare the effects of market volatilities on John Hancock and Picc Prop 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 Picc Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Picc Prop.

Diversification Opportunities for John Hancock and Picc Prop

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between JLKLX and PPCCF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Picc Prop Casualty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picc Prop Casualty 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 Funds are associated (or correlated) with Picc Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picc Prop Casualty has no effect on the direction of John Hancock i.e., John Hancock and Picc Prop go up and down completely randomly.

Pair Corralation between John Hancock and Picc Prop

Assuming the 90 days horizon John Hancock Funds is expected to under-perform the Picc Prop. But the mutual fund apears to be less risky and, when comparing its historical volatility, John Hancock Funds is 1.14 times less risky than Picc Prop. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Picc Prop Casualty is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Picc Prop Casualty on April 6, 2022 and sell it today you would earn a total of  10.00  from holding Picc Prop Casualty or generate 10.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

John Hancock Funds  vs.  Picc Prop Casualty

 Performance (%) 
      Timeline 
John Hancock Funds 
JLKLX Performance
0 of 100
Over the last 90 days John Hancock Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

JLKLX Price Channel

Picc Prop Casualty 
PPCCF Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Picc Prop Casualty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Picc Prop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0599
Payout Ratio
0.38
Last Split Factor
3:2
Forward Annual Dividend Rate
0.06
Dividend Date
2017-08-22
Ex Dividend Date
2022-06-23
Last Split Date
2018-06-27

PPCCF Price Channel

John Hancock and Picc Prop Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with John Hancock and Picc Prop

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

John Hancock Funds

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against John Hancock as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. John Hancock's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, John Hancock's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to John Hancock Funds.
The idea behind John Hancock Funds and Picc Prop Casualty 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.

Picc Prop Casualty

Pair trading matchups for Picc Prop

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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