Correlation Between John Hancock and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both John Hancock and Needham Aggressive 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 Needham Aggressive 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 Needham Aggressive Growth, you can compare the effects of market volatilities on John Hancock and Needham Aggressive 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 Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Needham Aggressive.
Diversification Opportunities for John Hancock and Needham Aggressive
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Needham is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth 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 Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of John Hancock i.e., John Hancock and Needham Aggressive go up and down completely randomly.
Pair Corralation between John Hancock and Needham Aggressive
Assuming the 90 days horizon John Hancock is expected to generate 4.74 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, John Hancock Bond is 4.46 times less risky than Needham Aggressive. It trades about 0.12 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,981 in Needham Aggressive Growth on September 12, 2024 and sell it today you would earn a total of 170.00 from holding Needham Aggressive Growth or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Bond vs. Needham Aggressive Growth
Performance |
| Timeline |
| John Hancock Bond |
| Needham Aggressive Growth |
John Hancock and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Needham Aggressive
The main advantage of trading using opposite John Hancock and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| John Hancock vs. Metropolitan West Total | John Hancock vs. SCOR PK | John Hancock vs. Morningstar Unconstrained Allocation | John Hancock vs. Thrivent High Yield |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. HUMANA INC | Needham Aggressive vs. Barloworld Ltd ADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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