Correlation Between John Hancock and Hood River
Can any of the company-specific risk be diversified away by investing in both John Hancock and Hood River 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 Hood River 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 Hood River New, you can compare the effects of market volatilities on John Hancock and Hood River 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 Hood River. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Hood River.
Diversification Opportunities for John Hancock and Hood River
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Hood is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Hood River New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hood River New 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 Hood River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hood River New has no effect on the direction of John Hancock i.e., John Hancock and Hood River go up and down completely randomly.
Pair Corralation between John Hancock and Hood River
Assuming the 90 days horizon John Hancock is expected to generate 8.69 times less return on investment than Hood River. But when comparing it to its historical volatility, John Hancock Funds is 3.61 times less risky than Hood River. It trades about 0.14 of its potential returns per unit of risk. Hood River New is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Hood River New on September 3, 2024 and sell it today you would earn a total of 420.00 from holding Hood River New or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.2% |
| Values | Daily Returns |
John Hancock Funds vs. Hood River New
Performance |
| Timeline |
| John Hancock Funds |
| Hood River New |
John Hancock and Hood River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Hood River
The main advantage of trading using opposite John Hancock and Hood River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Hood River 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 Hood River will offset losses from the drop in Hood River's long position.| John Hancock vs. Vanguard Lifestrategy Moderate | John Hancock vs. Vanguard Lifestrategy Income | John Hancock vs. Vanguard Lifestrategy Growth | John Hancock vs. Vanguard Explorer Fund |
| Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard 500 Index | Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard Total Stock |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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