Correlation Between John Hancock and Ab Concentrated
Can any of the company-specific risk be diversified away by investing in both John Hancock and Ab Concentrated 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 Ab Concentrated 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 Ab Centrated Growth, you can compare the effects of market volatilities on John Hancock and Ab Concentrated 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 Ab Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ab Concentrated.
Diversification Opportunities for John Hancock and Ab Concentrated
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and WPASX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Ab Centrated Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Centrated Growth 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 Ab Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Centrated Growth has no effect on the direction of John Hancock i.e., John Hancock and Ab Concentrated go up and down completely randomly.
Pair Corralation between John Hancock and Ab Concentrated
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.1 times more return on investment than Ab Concentrated. However, John Hancock is 1.1 times more volatile than Ab Centrated Growth. It trades about 0.22 of its potential returns per unit of risk. Ab Centrated Growth is currently generating about 0.09 per unit of risk. If you would invest 2,611 in John Hancock Disciplined on August 26, 2024 and sell it today you would earn a total of 138.00 from holding John Hancock Disciplined or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. Ab Centrated Growth
Performance |
| Timeline |
| John Hancock Disciplined |
| Ab Centrated Growth |
John Hancock and Ab Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Ab Concentrated
The main advantage of trading using opposite John Hancock and Ab Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ab Concentrated 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 Ab Concentrated will offset losses from the drop in Ab Concentrated's long position.| John Hancock vs. Ab Centrated Growth | John Hancock vs. Chase Growth Fund | John Hancock vs. Mid Cap Growth | John Hancock vs. Victory Rs Growth |
| Ab Concentrated vs. Ab Global E | Ab Concentrated vs. Ab Global E | Ab Concentrated vs. Ab Global E | Ab Concentrated vs. Ab Minnesota Portfolio |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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