Correlation Between John Hancock and Guidepath Conservative
Can any of the company-specific risk be diversified away by investing in both John Hancock and Guidepath Conservative 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 Guidepath Conservative 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 Guidepath Conservative Income, you can compare the effects of market volatilities on John Hancock and Guidepath Conservative 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 Guidepath Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Guidepath Conservative.
Diversification Opportunities for John Hancock and Guidepath Conservative
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Guidepath is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Guidepath Conservative Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Conservative 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 Guidepath Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Conservative has no effect on the direction of John Hancock i.e., John Hancock and Guidepath Conservative go up and down completely randomly.
Pair Corralation between John Hancock and Guidepath Conservative
Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Guidepath Conservative. In addition to that, John Hancock is 11.34 times more volatile than Guidepath Conservative Income. It trades about -0.3 of its total potential returns per unit of risk. Guidepath Conservative Income is currently generating about -0.1 per unit of volatility. If you would invest 969.00 in Guidepath Conservative Income on October 13, 2024 and sell it today you would lose (3.00) from holding Guidepath Conservative Income or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Guidepath Conservative Income
Performance |
| Timeline |
| John Hancock Financial |
| Guidepath Conservative |
John Hancock and Guidepath Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Guidepath Conservative
The main advantage of trading using opposite John Hancock and Guidepath Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Guidepath Conservative 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 Guidepath Conservative will offset losses from the drop in Guidepath Conservative'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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