Correlation Between John Hancock and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both John Hancock and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Var and Lord Abbett Trust, you can compare the effects of market volatilities on John Hancock and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Lord Abbett.
Diversification Opportunities for John Hancock and Lord Abbett
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between John and Lord is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Var and Lord Abbett Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Trust 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 Var are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Trust has no effect on the direction of John Hancock i.e., John Hancock and Lord Abbett go up and down completely randomly.
Pair Corralation between John Hancock and Lord Abbett
Assuming the 90 days horizon John Hancock Var is expected to generate 1.37 times more return on investment than Lord Abbett. However, John Hancock is 1.37 times more volatile than Lord Abbett Trust. It trades about 0.0 of its potential returns per unit of risk. Lord Abbett Trust is currently generating about -0.13 per unit of risk. If you would invest 2,407 in John Hancock Var on September 5, 2024 and sell it today you would lose (4.00) from holding John Hancock Var or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Var vs. Lord Abbett Trust
Performance |
| Timeline |
| John Hancock Var |
| Lord Abbett Trust |
John Hancock and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Lord Abbett
The main advantage of trading using opposite John Hancock and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| John Hancock vs. Virtus Dfa 2040 | John Hancock vs. Transamerica Asset Allocation | John Hancock vs. T Rowe Price | John Hancock vs. Legg Mason Partners |
| Lord Abbett vs. Alphacentric Lifesci Healthcare | Lord Abbett vs. Baillie Gifford Health | Lord Abbett vs. John Hancock Var | Lord Abbett vs. Health Biotchnology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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