Correlation Between John Hancock and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both John Hancock and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on John Hancock and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Growth Strategy.
Diversification Opportunities for John Hancock and Growth Strategy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Growth is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of John Hancock i.e., John Hancock and Growth Strategy go up and down completely randomly.
Pair Corralation between John Hancock and Growth Strategy
Considering the 90-day investment horizon John Hancock Financial is expected to generate 3.55 times more return on investment than Growth Strategy. However, John Hancock is 3.55 times more volatile than Growth Strategy Fund. It trades about 0.33 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.05 per unit of risk. If you would invest 3,373 in John Hancock Financial on August 25, 2024 and sell it today you would earn a total of 522.00 from holding John Hancock Financial or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
John Hancock Financial vs. Growth Strategy Fund
Performance |
| Timeline |
| John Hancock Financial |
| Growth Strategy |
John Hancock and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Growth Strategy
The main advantage of trading using opposite John Hancock and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| John Hancock vs. MFS High Income | John Hancock vs. MFS High Yield | John Hancock vs. Blackrock Muniholdings Quality | John Hancock vs. MFS Government Markets |
| Growth Strategy vs. Financials Ultrasector Profund | Growth Strategy vs. Vanguard Financials Index | Growth Strategy vs. 1919 Financial Services | Growth Strategy vs. John Hancock Financial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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