Correlation Between Alger Smallcap and John Hancock
Can any of the company-specific risk be diversified away by investing in both Alger Smallcap 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 Alger Smallcap and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Smallcap Growth and John Hancock Ii, you can compare the effects of market volatilities on Alger Smallcap 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 Alger Smallcap with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smallcap and John Hancock.
Diversification Opportunities for Alger Smallcap and John Hancock
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and John is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smallcap Growth and John Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Ii and Alger Smallcap 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 Alger Smallcap Growth 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 Ii has no effect on the direction of Alger Smallcap i.e., Alger Smallcap and John Hancock go up and down completely randomly.
Pair Corralation between Alger Smallcap and John Hancock
Assuming the 90 days horizon Alger Smallcap Growth is expected to generate 0.99 times more return on investment than John Hancock. However, Alger Smallcap Growth is 1.01 times less risky than John Hancock. It trades about 0.04 of its potential returns per unit of risk. John Hancock Ii is currently generating about 0.0 per unit of risk. If you would invest 864.00 in Alger Smallcap Growth on October 9, 2024 and sell it today you would earn a total of 216.00 from holding Alger Smallcap Growth or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Smallcap Growth vs. John Hancock Ii
Performance |
| Timeline |
| Alger Smallcap Growth |
| John Hancock Ii |
Alger Smallcap and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Smallcap and John Hancock
The main advantage of trading using opposite Alger Smallcap and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smallcap 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.| Alger Smallcap vs. Needham Small Cap | Alger Smallcap vs. Vy Columbia Small | Alger Smallcap vs. Glg Intl Small | Alger Smallcap vs. Ab Small Cap |
| John Hancock vs. Atac Inflation Rotation | John Hancock vs. Ab Bond Inflation | John Hancock vs. Arrow Managed Futures | John Hancock vs. Ab Bond Inflation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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