Correlation Between Growth Fund and John Hancock
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and John Hancock Investors, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and John Hancock.
Diversification Opportunities for Growth Fund and John Hancock
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and John is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and John Hancock Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investors and Growth Fund 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 Growth Fund Of 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 Investors has no effect on the direction of Growth Fund i.e., Growth Fund and John Hancock go up and down completely randomly.
Pair Corralation between Growth Fund and John Hancock
Assuming the 90 days horizon Growth Fund Of is expected to generate 2.26 times more return on investment than John Hancock. However, Growth Fund is 2.26 times more volatile than John Hancock Investors. It trades about 0.1 of its potential returns per unit of risk. John Hancock Investors is currently generating about 0.13 per unit of risk. If you would invest 6,152 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 1,679 from holding Growth Fund Of or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Growth Fund Of vs. John Hancock Investors
Performance |
| Timeline |
| Growth Fund |
| John Hancock Investors |
Growth Fund and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and John Hancock
The main advantage of trading using opposite Growth Fund and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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