Correlation Between Core Bond and John Hancock
Can any of the company-specific risk be diversified away by investing in both Core Bond 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 Core Bond and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Bond Series and John Hancock Financial, you can compare the effects of market volatilities on Core Bond 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 Core Bond with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Bond and John Hancock.
Diversification Opportunities for Core Bond and John Hancock
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Core and John is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Core Bond Series and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Core Bond 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 Core Bond Series 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 Financial has no effect on the direction of Core Bond i.e., Core Bond and John Hancock go up and down completely randomly.
Pair Corralation between Core Bond and John Hancock
Assuming the 90 days horizon Core Bond is expected to generate 13.55 times less return on investment than John Hancock. But when comparing it to its historical volatility, Core Bond Series is 5.35 times less risky than John Hancock. It trades about 0.14 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,411 in John Hancock Financial on September 2, 2024 and sell it today you would earn a total of 529.00 from holding John Hancock Financial or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Bond Series vs. John Hancock Financial
Performance |
| Timeline |
| Core Bond Series |
| John Hancock Financial |
Core Bond and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Bond and John Hancock
The main advantage of trading using opposite Core Bond and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Bond 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.| Core Bond vs. John Hancock Financial | Core Bond vs. Mesirow Financial Small | Core Bond vs. Prudential Jennison Financial | Core Bond vs. Gabelli Global Financial |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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