Correlation Between John Hancock and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both John Hancock and Vanguard Total 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 Vanguard Total 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 Vanguard Total Bond, you can compare the effects of market volatilities on John Hancock and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Vanguard Total.
Diversification Opportunities for John Hancock and Vanguard Total
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Vanguard is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Bond 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of John Hancock i.e., John Hancock and Vanguard Total go up and down completely randomly.
Pair Corralation between John Hancock and Vanguard Total
Assuming the 90 days horizon John Hancock Government is expected to under-perform the Vanguard Total. In addition to that, John Hancock is 1.08 times more volatile than Vanguard Total Bond. It trades about -0.05 of its total potential returns per unit of risk. Vanguard Total Bond is currently generating about -0.05 per unit of volatility. If you would invest 958.00 in Vanguard Total Bond on August 27, 2024 and sell it today you would lose (3.00) from holding Vanguard Total Bond or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Vanguard Total Bond
Performance |
| Timeline |
| John Hancock Government |
| Vanguard Total Bond |
John Hancock and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Vanguard Total
The main advantage of trading using opposite John Hancock and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total'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 |
| Vanguard Total vs. Blackrock Government Bond | Vanguard Total vs. Dreyfus Government Cash | Vanguard Total vs. John Hancock Government | Vanguard Total vs. Aig 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |