Correlation Between John Hancock and Davis International
Can any of the company-specific risk be diversified away by investing in both John Hancock and Davis International 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 Davis International 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 Davis International Fund, you can compare the effects of market volatilities on John Hancock and Davis International 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 Davis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Davis International.
Diversification Opportunities for John Hancock and Davis International
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Davis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Davis International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis International 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 Davis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis International has no effect on the direction of John Hancock i.e., John Hancock and Davis International go up and down completely randomly.
Pair Corralation between John Hancock and Davis International
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.52 times more return on investment than Davis International. However, John Hancock is 1.52 times more volatile than Davis International Fund. It trades about 0.13 of its potential returns per unit of risk. Davis International Fund is currently generating about -0.04 per unit of risk. If you would invest 3,554 in John Hancock Financial on October 26, 2024 and sell it today you would earn a total of 134.00 from holding John Hancock Financial or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Davis International Fund
Performance |
| Timeline |
| John Hancock Financial |
| Davis International |
John Hancock and Davis International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Davis International
The main advantage of trading using opposite John Hancock and Davis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Davis International 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 Davis International will offset losses from the drop in Davis International'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 |
| Davis International vs. Financials Ultrasector Profund | Davis International vs. Davis Financial Fund | Davis International vs. John Hancock Financial | Davis International vs. Financial Industries Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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