Correlation Between John Hancock and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both John Hancock and Smallcap 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 Smallcap 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 Smallcap Growth Fund, you can compare the effects of market volatilities on John Hancock and Smallcap 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Smallcap Growth.
Diversification Opportunities for John Hancock and Smallcap Growth
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between John and Smallcap is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of John Hancock i.e., John Hancock and Smallcap Growth go up and down completely randomly.
Pair Corralation between John Hancock and Smallcap Growth
If you would invest 3,532 in John Hancock Financial on November 3, 2024 and sell it today you would earn a total of 219.00 from holding John Hancock Financial or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
John Hancock Financial vs. Smallcap Growth Fund
Performance |
| Timeline |
| John Hancock Financial |
| Smallcap Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
John Hancock and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Smallcap Growth
The main advantage of trading using opposite John Hancock and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Smallcap 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 Smallcap Growth will offset losses from the drop in Smallcap 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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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