Correlation Between John Hancock and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both John Hancock and Kinetics Small 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 Kinetics Small 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 Kinetics Small Cap, you can compare the effects of market volatilities on John Hancock and Kinetics Small 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 Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Kinetics Small.
Diversification Opportunities for John Hancock and Kinetics Small
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and Kinetics is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap 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 Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of John Hancock i.e., John Hancock and Kinetics Small go up and down completely randomly.
Pair Corralation between John Hancock and Kinetics Small
Assuming the 90 days horizon John Hancock Government is expected to under-perform the Kinetics Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, John Hancock Government is 5.73 times less risky than Kinetics Small. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Kinetics Small Cap is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 13,625 in Kinetics Small Cap on August 29, 2024 and sell it today you would earn a total of 6,326 from holding Kinetics Small Cap or generate 46.43% 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. Kinetics Small Cap
Performance |
| Timeline |
| John Hancock Government |
| Kinetics Small Cap |
John Hancock and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Kinetics Small
The main advantage of trading using opposite John Hancock and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.| John Hancock vs. Us Global Investors | John Hancock vs. T Rowe Price | John Hancock vs. Ab Global Bond | John Hancock vs. Barings Global Floating |
| Kinetics Small vs. Fidelity Series Government | Kinetics Small vs. Us Government Securities | Kinetics Small vs. John Hancock Government | Kinetics Small vs. Dws Government Money |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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