Correlation Between John Hancock and Victory Sycamore
Can any of the company-specific risk be diversified away by investing in both John Hancock and Victory Sycamore 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 Victory Sycamore 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 Victory Sycamore Established, you can compare the effects of market volatilities on John Hancock and Victory Sycamore 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 Victory Sycamore. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Victory Sycamore.
Diversification Opportunities for John Hancock and Victory Sycamore
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Victory is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Victory Sycamore Established in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Sycamore Est 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 Victory Sycamore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Sycamore Est has no effect on the direction of John Hancock i.e., John Hancock and Victory Sycamore go up and down completely randomly.
Pair Corralation between John Hancock and Victory Sycamore
Assuming the 90 days horizon John Hancock is expected to generate 1.13 times less return on investment than Victory Sycamore. But when comparing it to its historical volatility, John Hancock Bond is 2.35 times less risky than Victory Sycamore. It trades about 0.04 of its potential returns per unit of risk. Victory Sycamore Established is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,387 in Victory Sycamore Established on November 27, 2024 and sell it today you would earn a total of 271.00 from holding Victory Sycamore Established or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Bond vs. Victory Sycamore Established
Performance |
| Timeline |
| John Hancock Bond |
| Victory Sycamore Est |
John Hancock and Victory Sycamore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Victory Sycamore
The main advantage of trading using opposite John Hancock and Victory Sycamore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Victory Sycamore 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 Victory Sycamore will offset losses from the drop in Victory Sycamore's long position.| John Hancock vs. John Hancock International | John Hancock vs. Mfs International Diversification | John Hancock vs. Mfs Growth Fund | John Hancock vs. Invesco Diversified Dividend |
| Victory Sycamore vs. Victory Sycamore Small | Victory Sycamore vs. Prudential Total Return | Victory Sycamore vs. John Hancock Bond | Victory Sycamore vs. Harding Loevner International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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