Correlation Between John Hancock and The Hartford
Can any of the company-specific risk be diversified away by investing in both John Hancock and The Hartford 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 The Hartford 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 The Hartford International, you can compare the effects of market volatilities on John Hancock and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and The Hartford.
Diversification Opportunities for John Hancock and The Hartford
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and The is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Interna has no effect on the direction of John Hancock i.e., John Hancock and The Hartford go up and down completely randomly.
Pair Corralation between John Hancock and The Hartford
Assuming the 90 days horizon John Hancock is expected to generate 6.55 times less return on investment than The Hartford. But when comparing it to its historical volatility, John Hancock Government is 2.14 times less risky than The Hartford. It trades about 0.02 of its potential returns per unit of risk. The Hartford International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,722 in The Hartford International on August 28, 2024 and sell it today you would earn a total of 125.00 from holding The Hartford International or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
John Hancock Government vs. The Hartford International
Performance |
| Timeline |
| John Hancock Government |
| Hartford Interna |
John Hancock and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and The Hartford
The main advantage of trading using opposite John Hancock and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Balanced | John Hancock vs. Multimanager Lifestyle Aggressive |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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