Correlation Between Nuveen Small and John Hancock
Can any of the company-specific risk be diversified away by investing in both Nuveen Small 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 Nuveen Small and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Small Cap and John Hancock Disciplined, you can compare the effects of market volatilities on Nuveen Small 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 Nuveen Small with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Small and John Hancock.
Diversification Opportunities for Nuveen Small and John Hancock
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Nuveen Small 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 Nuveen Small 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 Disciplined has no effect on the direction of Nuveen Small i.e., Nuveen Small and John Hancock go up and down completely randomly.
Pair Corralation between Nuveen Small and John Hancock
Assuming the 90 days horizon Nuveen Small is expected to generate 1.03 times less return on investment than John Hancock. In addition to that, Nuveen Small is 1.33 times more volatile than John Hancock Disciplined. It trades about 0.05 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.07 per unit of volatility. If you would invest 2,406 in John Hancock Disciplined on September 3, 2024 and sell it today you would earn a total of 841.00 from holding John Hancock Disciplined or generate 34.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Small Cap vs. John Hancock Disciplined
Performance |
| Timeline |
| Nuveen Small Cap |
| John Hancock Disciplined |
Nuveen Small and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Small and John Hancock
The main advantage of trading using opposite Nuveen Small and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Small 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.| Nuveen Small vs. Nuveen Small Cap | Nuveen Small vs. Nuveen Small Cap | Nuveen Small vs. First American Investment | Nuveen Small vs. Nuveen Mid Cap |
| John Hancock vs. Nuveen Small Cap | John Hancock vs. Ultramid Cap Profund Ultramid Cap | John Hancock vs. Blackrock Mid Cap |
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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