Correlation Between John Hancock and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both John Hancock and Transamerica Emerging 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 Transamerica Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Disciplined and Transamerica Emerging Markets, you can compare the effects of market volatilities on John Hancock and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Transamerica Emerging.
Diversification Opportunities for John Hancock and Transamerica Emerging
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Transamerica is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Disciplined are associated (or correlated) with Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of John Hancock i.e., John Hancock and Transamerica Emerging go up and down completely randomly.
Pair Corralation between John Hancock and Transamerica Emerging
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.07 times more return on investment than Transamerica Emerging. However, John Hancock is 1.07 times more volatile than Transamerica Emerging Markets. It trades about 0.02 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 2,644 in John Hancock Disciplined on September 13, 2024 and sell it today you would earn a total of 19.00 from holding John Hancock Disciplined or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. Transamerica Emerging Markets
Performance |
| Timeline |
| John Hancock Disciplined |
| Transamerica Emerging |
John Hancock and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Transamerica Emerging
The main advantage of trading using opposite John Hancock and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging'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 |
| Transamerica Emerging vs. Smallcap Growth Fund | Transamerica Emerging vs. L Abbett Growth | Transamerica Emerging vs. T Rowe Price | Transamerica Emerging vs. Mid Cap Growth |
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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