Correlation Between John Hancock and Vanguard Long-term
Can any of the company-specific risk be diversified away by investing in both John Hancock and Vanguard Long-term 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 Vanguard Long-term 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 Vanguard Long Term Bond, you can compare the effects of market volatilities on John Hancock and Vanguard Long-term 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 Vanguard Long-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Vanguard Long-term.
Diversification Opportunities for John Hancock and Vanguard Long-term
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and Vanguard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Vanguard Long Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Long Term 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 Vanguard Long-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Long Term has no effect on the direction of John Hancock i.e., John Hancock and Vanguard Long-term go up and down completely randomly.
Pair Corralation between John Hancock and Vanguard Long-term
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.06 times more return on investment than Vanguard Long-term. However, John Hancock is 2.06 times more volatile than Vanguard Long Term Bond. It trades about 0.11 of its potential returns per unit of risk. Vanguard Long Term Bond is currently generating about 0.03 per unit of risk. If you would invest 2,724 in John Hancock Financial on September 2, 2024 and sell it today you would earn a total of 1,216 from holding John Hancock Financial or generate 44.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Vanguard Long Term Bond
Performance |
| Timeline |
| John Hancock Financial |
| Vanguard Long Term |
John Hancock and Vanguard Long-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Vanguard Long-term
The main advantage of trading using opposite John Hancock and Vanguard Long-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Vanguard Long-term 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 Vanguard Long-term will offset losses from the drop in Vanguard Long-term'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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