Correlation Between John Hancock and Diversified Bond
Can any of the company-specific risk be diversified away by investing in both John Hancock and Diversified Bond 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 Diversified Bond 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 Diversified Bond Fund, you can compare the effects of market volatilities on John Hancock and Diversified Bond 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 Diversified Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Diversified Bond.
Diversification Opportunities for John Hancock and Diversified Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Diversified is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Diversified Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Bond 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 Diversified Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Bond has no effect on the direction of John Hancock i.e., John Hancock and Diversified Bond go up and down completely randomly.
Pair Corralation between John Hancock and Diversified Bond
Assuming the 90 days horizon John Hancock Government is expected to generate 0.91 times more return on investment than Diversified Bond. However, John Hancock Government is 1.1 times less risky than Diversified Bond. It trades about 0.16 of its potential returns per unit of risk. Diversified Bond Fund is currently generating about 0.13 per unit of risk. If you would invest 780.00 in John Hancock Government on September 12, 2024 and sell it today you would earn a total of 7.00 from holding John Hancock Government or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Diversified Bond Fund
Performance |
| Timeline |
| John Hancock Government |
| Diversified Bond |
John Hancock and Diversified Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Diversified Bond
The main advantage of trading using opposite John Hancock and Diversified Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Diversified Bond 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 Diversified Bond will offset losses from the drop in Diversified Bond's long position.| John Hancock vs. Vanguard Gnma Fund | John Hancock vs. Vanguard Intermediate Term Government | John Hancock vs. Us Government Securities | John Hancock vs. Us Government Securities |
| Diversified Bond vs. T Rowe Price | Diversified Bond vs. The National Tax Free | Diversified Bond vs. Ab Bond Inflation | Diversified Bond vs. Ambrus Core Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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