Correlation Between Baird Small/mid and John Hancock
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid 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 Baird Small/mid and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Smallmid Cap and John Hancock Income, you can compare the effects of market volatilities on Baird Small/mid 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 Baird Small/mid with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and John Hancock.
Diversification Opportunities for Baird Small/mid and John Hancock
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baird and John is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Baird Small/mid 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 Baird Smallmid Cap 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 Income has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and John Hancock go up and down completely randomly.
Pair Corralation between Baird Small/mid and John Hancock
Assuming the 90 days horizon Baird Smallmid Cap is expected to generate 3.63 times more return on investment than John Hancock. However, Baird Small/mid is 3.63 times more volatile than John Hancock Income. It trades about 0.04 of its potential returns per unit of risk. John Hancock Income is currently generating about 0.06 per unit of risk. If you would invest 1,488 in Baird Smallmid Cap on September 4, 2024 and sell it today you would earn a total of 311.00 from holding Baird Smallmid Cap or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Smallmid Cap vs. John Hancock Income
Performance |
| Timeline |
| Baird Smallmid Cap |
| John Hancock Income |
Baird Small/mid and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and John Hancock
The main advantage of trading using opposite Baird Small/mid and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid 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.| Baird Small/mid vs. Artisan High Income | Baird Small/mid vs. Bbh Intermediate Municipal | Baird Small/mid vs. Maryland Tax Free Bond | Baird Small/mid vs. Ab Bond Inflation |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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