Correlation Between John Hancock and Oakmark International
Can any of the company-specific risk be diversified away by investing in both John Hancock and Oakmark International 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 Oakmark International 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 Oakmark International Fund, you can compare the effects of market volatilities on John Hancock and Oakmark International 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Oakmark International.
Diversification Opportunities for John Hancock and Oakmark International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Oakmark is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of John Hancock i.e., John Hancock and Oakmark International go up and down completely randomly.
Pair Corralation between John Hancock and Oakmark International
Assuming the 90 days horizon John Hancock Funds is expected to generate 0.45 times more return on investment than Oakmark International. However, John Hancock Funds is 2.23 times less risky than Oakmark International. It trades about 0.1 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.0 per unit of risk. If you would invest 967.00 in John Hancock Funds on September 4, 2024 and sell it today you would earn a total of 156.00 from holding John Hancock Funds or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Funds vs. Oakmark International Fund
Performance |
| Timeline |
| John Hancock Funds |
| Oakmark International |
John Hancock and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Oakmark International
The main advantage of trading using opposite John Hancock and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International'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 |
| Oakmark International vs. Artisan Small Cap | Oakmark International vs. Ancorathelen Small Mid Cap | Oakmark International vs. Tax Managed Mid Small | Oakmark International vs. Baird Smallmid 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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