Correlation Between John Hancock and Diversified Bond
Can any of the company-specific risk be diversified away by investing in both John Hancock and Diversified Bond 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 Diversified Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Funds and Diversified Bond Fund, you can compare the effects of market volatilities on John Hancock and Diversified Bond 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 Diversified Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Diversified Bond.
Diversification Opportunities for John Hancock and Diversified Bond
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between John and Diversified is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Diversified Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Bond 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 Funds are associated (or correlated) with Diversified Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Bond has no effect on the direction of John Hancock i.e., John Hancock and Diversified Bond go up and down completely randomly.
Pair Corralation between John Hancock and Diversified Bond
Assuming the 90 days horizon John Hancock Funds is expected to generate 0.97 times more return on investment than Diversified Bond. However, John Hancock Funds is 1.03 times less risky than Diversified Bond. It trades about 0.34 of its potential returns per unit of risk. Diversified Bond Fund is currently generating about 0.11 per unit of risk. If you would invest 1,097 in John Hancock Funds on September 4, 2024 and sell it today you would earn a total of 26.00 from holding John Hancock Funds or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Funds vs. Diversified Bond Fund
Performance |
| Timeline |
| John Hancock Funds |
| Diversified Bond |
John Hancock and Diversified Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Diversified Bond
The main advantage of trading using opposite John Hancock and Diversified Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Diversified Bond 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 Diversified Bond will offset losses from the drop in Diversified Bond's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
| Diversified Bond vs. Mid Cap Value | Diversified Bond vs. Equity Growth Fund | Diversified Bond vs. Income Growth Fund | Diversified Bond vs. Diversified Bond Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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