Correlation Between John Hancock and Edge Midcap
Can any of the company-specific risk be diversified away by investing in both John Hancock and Edge Midcap 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 Edge Midcap 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 Edge Midcap Fund, you can compare the effects of market volatilities on John Hancock and Edge Midcap 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 Edge Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Edge Midcap.
Diversification Opportunities for John Hancock and Edge Midcap
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and Edge is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Edge Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edge Midcap Fund 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 Edge Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edge Midcap Fund has no effect on the direction of John Hancock i.e., John Hancock and Edge Midcap go up and down completely randomly.
Pair Corralation between John Hancock and Edge Midcap
Assuming the 90 days horizon John Hancock Government is expected to generate 0.37 times more return on investment than Edge Midcap. However, John Hancock Government is 2.68 times less risky than Edge Midcap. It trades about 0.16 of its potential returns per unit of risk. Edge Midcap Fund is currently generating about 0.02 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Edge Midcap Fund
Performance |
| Timeline |
| John Hancock Government |
| Edge Midcap Fund |
John Hancock and Edge Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Edge Midcap
The main advantage of trading using opposite John Hancock and Edge Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Edge Midcap 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 Edge Midcap will offset losses from the drop in Edge Midcap'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 |
| Edge Midcap vs. Baron Health Care | Edge Midcap vs. Alphacentric Lifesci Healthcare | Edge Midcap vs. The Gabelli Healthcare | Edge Midcap vs. Vanguard Health Care |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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