Correlation Between American Century and John Hancock
Can any of the company-specific risk be diversified away by investing in both American Century 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 American Century and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Global and John Hancock Variable, you can compare the effects of market volatilities on American Century 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 American Century with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and John Hancock.
Diversification Opportunities for American Century and John Hancock
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and John is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Century Global and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and American Century 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 American Century Global 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 Variable has no effect on the direction of American Century i.e., American Century and John Hancock go up and down completely randomly.
Pair Corralation between American Century and John Hancock
Assuming the 90 days horizon American Century Global is expected to generate 0.89 times more return on investment than John Hancock. However, American Century Global is 1.12 times less risky than John Hancock. It trades about 0.05 of its potential returns per unit of risk. John Hancock Variable is currently generating about 0.04 per unit of risk. If you would invest 1,172 in American Century Global on September 1, 2024 and sell it today you would earn a total of 264.00 from holding American Century Global or generate 22.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
American Century Global vs. John Hancock Variable
Performance |
| Timeline |
| American Century Global |
| John Hancock Variable |
American Century and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and John Hancock
The main advantage of trading using opposite American Century and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century 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.| American Century vs. Transamerica Financial Life | American Century vs. Prudential Jennison Financial | American Century vs. Fidelity Advisor Financial | American Century vs. Blackrock Financial Institutions |
| John Hancock vs. Pace Municipal Fixed | John Hancock vs. T Rowe Price | John Hancock vs. Old Westbury Municipal | 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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