Correlation Between John Hancock and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both John Hancock and Europacific Growth 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 John Hancock and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Financial and Europacific Growth Fund, you can compare the effects of market volatilities on John Hancock and Europacific Growth 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 John Hancock with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Europacific Growth.
Diversification Opportunities for John Hancock and Europacific Growth
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between John and Europacific is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and John Hancock 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 John Hancock Financial are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of John Hancock i.e., John Hancock and Europacific Growth go up and down completely randomly.
Pair Corralation between John Hancock and Europacific Growth
Considering the 90-day investment horizon John Hancock Financial is expected to generate 3.02 times more return on investment than Europacific Growth. However, John Hancock is 3.02 times more volatile than Europacific Growth Fund. It trades about 0.19 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.11 per unit of risk. If you would invest 3,502 in John Hancock Financial on October 23, 2024 and sell it today you would earn a total of 210.00 from holding John Hancock Financial or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
John Hancock Financial vs. Europacific Growth Fund
Performance |
| Timeline |
| John Hancock Financial |
| Europacific Growth |
John Hancock and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Europacific Growth
The main advantage of trading using opposite John Hancock and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
| Europacific Growth vs. Blackrock Financial Institutions | Europacific Growth vs. Goldman Sachs Trust | Europacific Growth vs. John Hancock Financial | Europacific Growth vs. Mesirow Financial Small |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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