Correlation Between John Hancock and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both John Hancock and Hartford 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 Hartford 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 The Hartford Growth, you can compare the effects of market volatilities on John Hancock and Hartford 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 Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Hartford Growth.
Diversification Opportunities for John Hancock and Hartford Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Hartford is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford 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 Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of John Hancock i.e., John Hancock and Hartford Growth go up and down completely randomly.
Pair Corralation between John Hancock and Hartford Growth
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.39 times more return on investment than Hartford Growth. However, John Hancock is 2.39 times more volatile than The Hartford Growth. It trades about 0.2 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.1 per unit of risk. If you would invest 2,649 in John Hancock Financial on September 13, 2024 and sell it today you would earn a total of 1,206 from holding John Hancock Financial or generate 45.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
John Hancock Financial vs. The Hartford Growth
Performance |
| Timeline |
| John Hancock Financial |
| Hartford Growth |
John Hancock and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Hartford Growth
The main advantage of trading using opposite John Hancock and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Hartford 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 Hartford Growth will offset losses from the drop in Hartford 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 |
| Hartford Growth vs. The Hartford Growth | Hartford Growth vs. The Hartford Growth | Hartford Growth vs. The Hartford Growth | Hartford Growth vs. The Hartford Growth |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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