Correlation Between Dunham Real and John Hancock
Can any of the company-specific risk be diversified away by investing in both Dunham 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 Dunham 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 Dunham Real Estate and John Hancock Variable, you can compare the effects of market volatilities on Dunham 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 Dunham Real with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and John Hancock.
Diversification Opportunities for Dunham Real and John Hancock
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and John is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dunham 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 Dunham 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 Dunham 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 Dunham Real i.e., Dunham Real and John Hancock go up and down completely randomly.
Pair Corralation between Dunham Real and John Hancock
Assuming the 90 days horizon Dunham Real Estate is expected to generate about the same return on investment as John Hancock Variable. However, Dunham Real is 1.12 times more volatile than John Hancock Variable. It trades about 0.1 of its potential returns per unit of risk. John Hancock Variable is currently producing about 0.11 per unit of risk. If you would invest 1,655 in John Hancock Variable on September 1, 2024 and sell it today you would earn a total of 571.00 from holding John Hancock Variable or generate 34.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. John Hancock Variable
Performance |
| Timeline |
| Dunham Real Estate |
| John Hancock Variable |
Dunham Real and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and John Hancock
The main advantage of trading using opposite Dunham Real and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham 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.| Dunham Real vs. Growth Opportunities Fund | Dunham Real vs. Nasdaq 100 Index Fund | Dunham Real vs. Eic Value Fund | Dunham Real vs. Auer Growth Fund |
| John Hancock vs. Pace Municipal Fixed | John Hancock vs. T Rowe Price | John Hancock vs. Old Westbury Municipal | John Hancock vs. T Rowe Price |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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