Correlation Between John Hancock and Alps/smith Short
Can any of the company-specific risk be diversified away by investing in both John Hancock and Alps/smith Short 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 Alps/smith Short 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 Alpssmith Short Duration, you can compare the effects of market volatilities on John Hancock and Alps/smith Short 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 Alps/smith Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Alps/smith Short.
Diversification Opportunities for John Hancock and Alps/smith Short
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Alps/smith is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Alpssmith Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpssmith Short Duration 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 Alps/smith Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpssmith Short Duration has no effect on the direction of John Hancock i.e., John Hancock and Alps/smith Short go up and down completely randomly.
Pair Corralation between John Hancock and Alps/smith Short
Assuming the 90 days horizon John Hancock Funds is expected to generate 3.7 times more return on investment than Alps/smith Short. However, John Hancock is 3.7 times more volatile than Alpssmith Short Duration. It trades about 0.08 of its potential returns per unit of risk. Alpssmith Short Duration is currently generating about 0.17 per unit of risk. If you would invest 950.00 in John Hancock Funds on September 3, 2024 and sell it today you would earn a total of 173.00 from holding John Hancock Funds or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Funds vs. Alpssmith Short Duration
Performance |
| Timeline |
| John Hancock Funds |
| Alpssmith Short Duration |
John Hancock and Alps/smith Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Alps/smith Short
The main advantage of trading using opposite John Hancock and Alps/smith Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Alps/smith Short 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 Alps/smith Short will offset losses from the drop in Alps/smith Short'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 |
| Alps/smith Short vs. T Rowe Price | Alps/smith Short vs. Franklin Lifesmart 2050 | Alps/smith Short vs. T Rowe Price | Alps/smith Short vs. John Hancock Funds |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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