Correlation Between Regional Bank and John Hancock
Can any of the company-specific risk be diversified away by investing in both Regional Bank 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 Regional Bank and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Bank Fund and John Hancock Enduring, you can compare the effects of market volatilities on Regional Bank 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 Regional Bank with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and John Hancock.
Diversification Opportunities for Regional Bank and John Hancock
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regional and John is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and John Hancock Enduring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Enduring and Regional Bank 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 Regional Bank Fund 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 Enduring has no effect on the direction of Regional Bank i.e., Regional Bank and John Hancock go up and down completely randomly.
Pair Corralation between Regional Bank and John Hancock
Assuming the 90 days horizon Regional Bank Fund is expected to generate 2.61 times more return on investment than John Hancock. However, Regional Bank is 2.61 times more volatile than John Hancock Enduring. It trades about 0.04 of its potential returns per unit of risk. John Hancock Enduring is currently generating about 0.07 per unit of risk. If you would invest 2,609 in Regional Bank Fund on September 3, 2024 and sell it today you would earn a total of 776.00 from holding Regional Bank Fund or generate 29.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Bank Fund vs. John Hancock Enduring
Performance |
| Timeline |
| Regional Bank |
| John Hancock Enduring |
Regional Bank and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and John Hancock
The main advantage of trading using opposite Regional Bank and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank 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.| Regional Bank vs. Fidelity Series 1000 | Regional Bank vs. Dodge Cox Stock | Regional Bank vs. American Mutual Fund | Regional Bank vs. Vanguard Windsor Fund |
| John Hancock vs. Balanced Fund Investor | John Hancock vs. Scharf Global Opportunity | John Hancock vs. T Rowe Price | John Hancock vs. Arrow Managed Futures |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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