Correlation Between John Hancock and George Putnam
Can any of the company-specific risk be diversified away by investing in both John Hancock and George Putnam 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 George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Variable and George Putnam Fund, you can compare the effects of market volatilities on John Hancock and George Putnam 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 George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and George Putnam.
Diversification Opportunities for John Hancock and George Putnam
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and George is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Variable and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam 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 Variable are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of John Hancock i.e., John Hancock and George Putnam go up and down completely randomly.
Pair Corralation between John Hancock and George Putnam
Assuming the 90 days horizon John Hancock Variable is expected to generate 1.03 times more return on investment than George Putnam. However, John Hancock is 1.03 times more volatile than George Putnam Fund. It trades about 0.14 of its potential returns per unit of risk. George Putnam Fund is currently generating about -0.06 per unit of risk. If you would invest 2,152 in John Hancock Variable on August 29, 2024 and sell it today you would earn a total of 61.00 from holding John Hancock Variable or generate 2.83% 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 Variable vs. George Putnam Fund
Performance |
| Timeline |
| John Hancock Variable |
| George Putnam |
John Hancock and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and George Putnam
The main advantage of trading using opposite John Hancock and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard 500 Index | John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard Total Stock |
| George Putnam vs. Sterling Capital Stratton | George Putnam vs. Virtus Real Estate | George Putnam vs. Msif Real Estate | George Putnam vs. John Hancock Variable |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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