Correlation Between John Hancock and American Century
Can any of the company-specific risk be diversified away by investing in both John Hancock and American Century 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 American Century 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 American Century Investment, you can compare the effects of market volatilities on John Hancock and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and American Century.
Diversification Opportunities for John Hancock and American Century
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and American is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and American Century Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Inv 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Inv has no effect on the direction of John Hancock i.e., John Hancock and American Century go up and down completely randomly.
Pair Corralation between John Hancock and American Century
Assuming the 90 days horizon John Hancock is expected to generate 133.09 times less return on investment than American Century. But when comparing it to its historical volatility, John Hancock Funds is 103.05 times less risky than American Century. It trades about 0.09 of its potential returns per unit of risk. American Century Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 99.00 in American Century Investment on September 12, 2024 and sell it today you would earn a total of 1.00 from holding American Century Investment or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.22% |
| Values | Daily Returns |
John Hancock Funds vs. American Century Investment
Performance |
| Timeline |
| John Hancock Funds |
| American Century Inv |
John Hancock and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and American Century
The main advantage of trading using opposite John Hancock and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| John Hancock vs. Champlain Small | John Hancock vs. Guidemark Smallmid Cap | John Hancock vs. Kinetics Small Cap | John Hancock vs. Mutual Of America |
| American Century vs. Artisan Emerging Markets | American Century vs. Dws Emerging Markets | American Century vs. Franklin Emerging Market | American Century vs. Siit Emerging Markets |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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