Correlation Between John Hancock and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both John Hancock and Alger Spectra 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 Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Government and Alger Spectra, you can compare the effects of market volatilities on John Hancock and Alger Spectra 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 Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Alger Spectra.
Diversification Opportunities for John Hancock and Alger Spectra
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and Alger is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Alger Spectra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 Government are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of John Hancock i.e., John Hancock and Alger Spectra go up and down completely randomly.
Pair Corralation between John Hancock and Alger Spectra
Assuming the 90 days horizon John Hancock is expected to generate 21.35 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, John Hancock Government is 2.95 times less risky than Alger Spectra. It trades about 0.02 of its potential returns per unit of risk. Alger Spectra is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,682 in Alger Spectra on September 4, 2024 and sell it today you would earn a total of 1,569 from holding Alger Spectra or generate 93.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Alger Spectra
Performance |
| Timeline |
| John Hancock Government |
| Alger Spectra |
John Hancock and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Alger Spectra
The main advantage of trading using opposite John Hancock and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra'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 |
| Alger Spectra vs. Advent Claymore Convertible | Alger Spectra vs. Absolute Convertible Arbitrage | Alger Spectra vs. Gabelli Convertible And | Alger Spectra vs. Calamos Dynamic Convertible |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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