Correlation Between John Hancock and Ab Small
Can any of the company-specific risk be diversified away by investing in both John Hancock and Ab 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 Ab 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 Ab Small Cap, you can compare the effects of market volatilities on John Hancock and Ab 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ab Small.
Diversification Opportunities for John Hancock and Ab Small
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and SCCVX is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of John Hancock i.e., John Hancock and Ab Small go up and down completely randomly.
Pair Corralation between John Hancock and Ab Small
Assuming the 90 days horizon John Hancock is expected to generate 7.47 times less return on investment than Ab Small. But when comparing it to its historical volatility, John Hancock Government is 3.12 times less risky than Ab Small. It trades about 0.01 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,344 in Ab Small Cap on August 27, 2024 and sell it today you would earn a total of 165.00 from holding Ab Small Cap or generate 12.28% 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. Ab Small Cap
Performance |
| Timeline |
| John Hancock Government |
| Ab Small Cap |
John Hancock and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Ab Small
The main advantage of trading using opposite John Hancock and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ab 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 Ab Small will offset losses from the drop in Ab Small's 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 |
| Ab Small vs. Small Cap Core | Ab Small vs. Aquagold International | Ab Small vs. Morningstar Unconstrained Allocation | Ab Small vs. Thrivent High Yield |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |