Correlation Between John Hancock and RENN Fund
Can any of the company-specific risk be diversified away by investing in both John Hancock and RENN Fund 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 John Hancock and RENN Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Hedged and RENN Fund, you can compare the effects of market volatilities on John Hancock and RENN Fund 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 John Hancock with a short position of RENN Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and RENN Fund.
Diversification Opportunities for John Hancock and RENN Fund
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and RENN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Hedged and RENN Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENN Fund and John Hancock 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 John Hancock Hedged are associated (or correlated) with RENN Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENN Fund has no effect on the direction of John Hancock i.e., John Hancock and RENN Fund go up and down completely randomly.
Pair Corralation between John Hancock and RENN Fund
Considering the 90-day investment horizon John Hancock is expected to generate 2.4 times less return on investment than RENN Fund. But when comparing it to its historical volatility, John Hancock Hedged is 3.39 times less risky than RENN Fund. It trades about 0.08 of its potential returns per unit of risk. RENN Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 183.00 in RENN Fund on August 29, 2024 and sell it today you would earn a total of 68.00 from holding RENN Fund or generate 37.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Hedged vs. RENN Fund
Performance |
| Timeline |
| John Hancock Hedged |
| RENN Fund |
John Hancock and RENN Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and RENN Fund
The main advantage of trading using opposite John Hancock and RENN Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, RENN Fund 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 RENN Fund will offset losses from the drop in RENN Fund's long position.| John Hancock vs. Ellsworth Convertible Growth | John Hancock vs. Delaware Investments Florida | John Hancock vs. RENN Fund | John Hancock vs. Nuveen New Jersey |
| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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