Correlation Between American Funds and John Hancock
Can any of the company-specific risk be diversified away by investing in both American Funds 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 Funds 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 Funds Fundamental and John Hancock Investors, you can compare the effects of market volatilities on American Funds 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 Funds with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and John Hancock.
Diversification Opportunities for American Funds and John Hancock
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and John is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental 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 American Funds 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 Funds Fundamental 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 American Funds i.e., American Funds and John Hancock go up and down completely randomly.
Pair Corralation between American Funds and John Hancock
Assuming the 90 days horizon American Funds Fundamental is expected to generate 1.73 times more return on investment than John Hancock. However, American Funds is 1.73 times more volatile than John Hancock Investors. It trades about 0.12 of its potential returns per unit of risk. John Hancock Investors is currently generating about 0.19 per unit of risk. If you would invest 8,194 in American Funds Fundamental on October 23, 2024 and sell it today you would earn a total of 144.00 from holding American Funds Fundamental or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. John Hancock Investors
Performance |
| Timeline |
| American Funds Funda |
| John Hancock Investors |
American Funds and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and John Hancock
The main advantage of trading using opposite American Funds and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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 Funds vs. Small Pany Growth | American Funds vs. Needham Small Cap | American Funds vs. Praxis Small Cap | American Funds vs. Franklin Small Cap |
| John Hancock vs. DTF Tax Free | John Hancock vs. MFS Investment Grade | John Hancock vs. Eaton Vance National | John Hancock vs. Nuveen California Select |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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