Correlation Between John Hancock and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both John Hancock and Amcap Fund 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 Amcap Fund 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 Amcap Fund Class, you can compare the effects of market volatilities on John Hancock and Amcap Fund 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Amcap Fund.
Diversification Opportunities for John Hancock and Amcap Fund
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and AMCAP is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of John Hancock i.e., John Hancock and Amcap Fund go up and down completely randomly.
Pair Corralation between John Hancock and Amcap Fund
Assuming the 90 days horizon John Hancock is expected to generate 8.84 times less return on investment than Amcap Fund. But when comparing it to its historical volatility, John Hancock Government is 2.24 times less risky than Amcap Fund. It trades about 0.02 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,552 in Amcap Fund Class on September 2, 2024 and sell it today you would earn a total of 1,171 from holding Amcap Fund Class or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Amcap Fund Class
Performance |
| Timeline |
| John Hancock Government |
| Amcap Fund Class |
John Hancock and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Amcap Fund
The main advantage of trading using opposite John Hancock and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| John Hancock vs. Volumetric Fund Volumetric | John Hancock vs. Rbc Microcap Value | John Hancock vs. T Rowe Price | John Hancock vs. Falcon Focus Scv |
| Amcap Fund vs. Europacific Growth Fund | Amcap Fund vs. Washington Mutual Investors | Amcap Fund vs. Capital World Growth | Amcap Fund vs. American Balanced Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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