Correlation Between John Hancock and Wesmark Balanced
Can any of the company-specific risk be diversified away by investing in both John Hancock and Wesmark Balanced 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 Wesmark Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Esg and Wesmark Balanced Fund, you can compare the effects of market volatilities on John Hancock and Wesmark Balanced 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 Wesmark Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Wesmark Balanced.
Diversification Opportunities for John Hancock and Wesmark Balanced
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Wesmark is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Esg and Wesmark Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Balanced 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 Esg are associated (or correlated) with Wesmark Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Balanced has no effect on the direction of John Hancock i.e., John Hancock and Wesmark Balanced go up and down completely randomly.
Pair Corralation between John Hancock and Wesmark Balanced
Assuming the 90 days horizon John Hancock Esg is expected to generate 1.52 times more return on investment than Wesmark Balanced. However, John Hancock is 1.52 times more volatile than Wesmark Balanced Fund. It trades about 0.13 of its potential returns per unit of risk. Wesmark Balanced Fund is currently generating about 0.14 per unit of risk. If you would invest 2,528 in John Hancock Esg on August 30, 2024 and sell it today you would earn a total of 55.00 from holding John Hancock Esg or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Esg vs. Wesmark Balanced Fund
Performance |
| Timeline |
| John Hancock Esg |
| Wesmark Balanced |
John Hancock and Wesmark Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Wesmark Balanced
The main advantage of trading using opposite John Hancock and Wesmark Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Wesmark Balanced 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 Wesmark Balanced will offset losses from the drop in Wesmark Balanced'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 |
| Wesmark Balanced vs. Wesmark Growth Fund | Wesmark Balanced vs. Wesmark Government Bond | Wesmark Balanced vs. Wesmark Small Pany | Wesmark Balanced vs. Wesmark West Virginia |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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