Correlation Between John Hancock and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both John Hancock and Fidelity Series 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 Fidelity Series 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 Fidelity Series Government, you can compare the effects of market volatilities on John Hancock and Fidelity Series 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 Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Fidelity Series.
Diversification Opportunities for John Hancock and Fidelity Series
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Fidelity Series Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Gove 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 Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Gove has no effect on the direction of John Hancock i.e., John Hancock and Fidelity Series go up and down completely randomly.
Pair Corralation between John Hancock and Fidelity Series
Assuming the 90 days horizon John Hancock Government is expected to generate 1.05 times more return on investment than Fidelity Series. However, John Hancock is 1.05 times more volatile than Fidelity Series Government. It trades about -0.05 of its potential returns per unit of risk. Fidelity Series Government is currently generating about -0.08 per unit of risk. If you would invest 779.00 in John Hancock Government on August 27, 2024 and sell it today you would lose (3.00) from holding John Hancock Government or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Fidelity Series Government
Performance |
| Timeline |
| John Hancock Government |
| Fidelity Series Gove |
John Hancock and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Fidelity Series
The main advantage of trading using opposite John Hancock and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Fidelity Series 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 Fidelity Series will offset losses from the drop in Fidelity Series' 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 |
| Fidelity Series vs. Fidelity Short Term Treasury | Fidelity Series vs. Fidelity Inflation Protected Bond | Fidelity Series vs. Fidelity Long Term Treasury | Fidelity Series vs. Fidelity Emerging Markets |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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