Correlation Between John Hancock and Tax Managed
Can any of the company-specific risk be diversified away by investing in both John Hancock and Tax Managed 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 Tax Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Global and Tax Managed Mid Small, you can compare the effects of market volatilities on John Hancock and Tax Managed 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 Tax Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Tax Managed.
Diversification Opportunities for John Hancock and Tax Managed
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Tax is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Global and Tax Managed Mid Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Managed Mid 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 Global are associated (or correlated) with Tax Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Managed Mid has no effect on the direction of John Hancock i.e., John Hancock and Tax Managed go up and down completely randomly.
Pair Corralation between John Hancock and Tax Managed
Assuming the 90 days horizon John Hancock Global is expected to generate 0.74 times more return on investment than Tax Managed. However, John Hancock Global is 1.35 times less risky than Tax Managed. It trades about 0.21 of its potential returns per unit of risk. Tax Managed Mid Small is currently generating about 0.09 per unit of risk. If you would invest 1,143 in John Hancock Global on October 21, 2024 and sell it today you would earn a total of 29.00 from holding John Hancock Global or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Global vs. Tax Managed Mid Small
Performance |
| Timeline |
| John Hancock Global |
| Tax Managed Mid |
John Hancock and Tax Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Tax Managed
The main advantage of trading using opposite John Hancock and Tax Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Tax Managed 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 Tax Managed will offset losses from the drop in Tax Managed's long position.| John Hancock vs. Tax Managed Mid Small | John Hancock vs. Aqr Diversified Arbitrage | John Hancock vs. Schwab Small Cap Index | John Hancock vs. Global Diversified Income |
| Tax Managed vs. Angel Oak Multi Strategy | Tax Managed vs. Saat Defensive Strategy | Tax Managed vs. Nasdaq 100 2x Strategy | Tax Managed vs. Delaware Emerging Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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