Correlation Between Dodge Cox and John Hancock
Can any of the company-specific risk be diversified away by investing in both Dodge Cox 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 Dodge Cox and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Global Stock and John Hancock Global, you can compare the effects of market volatilities on Dodge Cox 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 Dodge Cox with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and John Hancock.
Diversification Opportunities for Dodge Cox and John Hancock
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Dodge Cox 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 Dodge Global Stock 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 Global has no effect on the direction of Dodge Cox i.e., Dodge Cox and John Hancock go up and down completely randomly.
Pair Corralation between Dodge Cox and John Hancock
Assuming the 90 days horizon Dodge Global Stock is expected to under-perform the John Hancock. In addition to that, Dodge Cox is 1.27 times more volatile than John Hancock Global. It trades about -0.03 of its total potential returns per unit of risk. John Hancock Global is currently generating about 0.06 per unit of volatility. If you would invest 1,241 in John Hancock Global on August 31, 2024 and sell it today you would earn a total of 8.00 from holding John Hancock Global or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. John Hancock Global
Performance |
| Timeline |
| Dodge Global Stock |
| John Hancock Global |
Dodge Cox and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and John Hancock
The main advantage of trading using opposite Dodge Cox and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox 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.| Dodge Cox vs. Artisan High Income | Dodge Cox vs. Prudential Short Duration | Dodge Cox vs. Valic Company I | Dodge Cox vs. Multi Manager High Yield |
| John Hancock vs. Franklin Mutual Global | John Hancock vs. Dodge Cox Global | John Hancock vs. Dodge Global Stock | John Hancock vs. Franklin Mutual Global |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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