Correlation Between John Hancock and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both John Hancock and Harding Loevner 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 Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Bond and Harding Loevner International, you can compare the effects of market volatilities on John Hancock and Harding Loevner 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 Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Harding Loevner.
Diversification Opportunities for John Hancock and Harding Loevner
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Harding is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte 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 Bond are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of John Hancock i.e., John Hancock and Harding Loevner go up and down completely randomly.
Pair Corralation between John Hancock and Harding Loevner
Assuming the 90 days horizon John Hancock Bond is expected to generate 0.45 times more return on investment than Harding Loevner. However, John Hancock Bond is 2.22 times less risky than Harding Loevner. It trades about 0.12 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.08 per unit of risk. If you would invest 1,348 in John Hancock Bond on September 1, 2024 and sell it today you would earn a total of 13.00 from holding John Hancock Bond or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
John Hancock Bond vs. Harding Loevner International
Performance |
| Timeline |
| John Hancock Bond |
| Harding Loevner Inte |
John Hancock and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Harding Loevner
The main advantage of trading using opposite John Hancock and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| John Hancock vs. John Hancock Disciplined | John Hancock vs. John Hancock Global | John Hancock vs. Aquagold International | John Hancock vs. Thrivent High Yield |
| Harding Loevner vs. Lazard International Strategic | Harding Loevner vs. Delaware Value Fund | Harding Loevner vs. American Beacon International | Harding Loevner vs. Hartford Schroders Emerging |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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