Correlation Between Commonwealth Real and John Hancock
Can any of the company-specific risk be diversified away by investing in both Commonwealth Real and John Hancock 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 Commonwealth Real and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Real Estate and John Hancock Variable, you can compare the effects of market volatilities on Commonwealth Real and John Hancock 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 Commonwealth Real with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Real and John Hancock.
Diversification Opportunities for Commonwealth Real and John Hancock
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Commonwealth and John is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Real Estate and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and Commonwealth Real 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 Commonwealth Real Estate are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Variable has no effect on the direction of Commonwealth Real i.e., Commonwealth Real and John Hancock go up and down completely randomly.
Pair Corralation between Commonwealth Real and John Hancock
Assuming the 90 days horizon Commonwealth Real Estate is expected to under-perform the John Hancock. In addition to that, Commonwealth Real is 1.17 times more volatile than John Hancock Variable. It trades about -0.22 of its total potential returns per unit of risk. John Hancock Variable is currently generating about 0.0 per unit of volatility. If you would invest 2,068 in John Hancock Variable on November 27, 2024 and sell it today you would lose (2.00) from holding John Hancock Variable or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Real Estate vs. John Hancock Variable
Performance |
| Timeline |
| Commonwealth Real Estate |
| John Hancock Variable |
Commonwealth Real and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Real and John Hancock
The main advantage of trading using opposite Commonwealth Real and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Real position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Commonwealth Real vs. Commonwealth Global Fund | Commonwealth Real vs. Commonwealth Australianew Zealand | Commonwealth Real vs. Amg Managers Centersquare | Commonwealth Real vs. Commonwealth Japan Fund |
| John Hancock vs. Manning Napier Diversified | John Hancock vs. Diversified Bond Fund | John Hancock vs. Guidepath Conservative Income | John Hancock vs. Prudential Core Conservative |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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