Correlation Between Dana Large and John Hancock
Can any of the company-specific risk be diversified away by investing in both Dana Large 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 Dana Large and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and John Hancock Investment, you can compare the effects of market volatilities on Dana Large 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 Dana Large with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and John Hancock.
Diversification Opportunities for Dana Large and John Hancock
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and John is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and John Hancock Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investment and Dana Large 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 Dana Large Cap 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 Investment has no effect on the direction of Dana Large i.e., Dana Large and John Hancock go up and down completely randomly.
Pair Corralation between Dana Large and John Hancock
Assuming the 90 days horizon Dana Large is expected to generate 1.28 times less return on investment than John Hancock. In addition to that, Dana Large is 1.14 times more volatile than John Hancock Investment. It trades about 0.16 of its total potential returns per unit of risk. John Hancock Investment is currently generating about 0.23 per unit of volatility. If you would invest 7,877 in John Hancock Investment on August 31, 2024 and sell it today you would earn a total of 338.00 from holding John Hancock Investment or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. John Hancock Investment
Performance |
| Timeline |
| Dana Large Cap |
| John Hancock Investment |
Dana Large and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and John Hancock
The main advantage of trading using opposite Dana Large and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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.| Dana Large vs. T Rowe Price | Dana Large vs. T Rowe Price | Dana Large vs. Touchstone Small Cap | Dana Large vs. Qs Growth Fund |
| John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard 500 Index | John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard Total Stock |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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