Correlation Between John Hancock and Vanguard Mid
Can any of the company-specific risk be diversified away by investing in both John Hancock and Vanguard Mid 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 Vanguard Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Multifactor and Vanguard Mid Cap Index, you can compare the effects of market volatilities on John Hancock and Vanguard Mid 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 Vanguard Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Vanguard Mid.
Diversification Opportunities for John Hancock and Vanguard Mid
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Vanguard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and Vanguard Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Multifactor are associated (or correlated) with Vanguard Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of John Hancock i.e., John Hancock and Vanguard Mid go up and down completely randomly.
Pair Corralation between John Hancock and Vanguard Mid
Given the investment horizon of 90 days John Hancock is expected to generate 1.11 times less return on investment than Vanguard Mid. In addition to that, John Hancock is 1.1 times more volatile than Vanguard Mid Cap Index. It trades about 0.22 of its total potential returns per unit of risk. Vanguard Mid Cap Index is currently generating about 0.27 per unit of volatility. If you would invest 26,639 in Vanguard Mid Cap Index on November 9, 2024 and sell it today you would earn a total of 1,074 from holding Vanguard Mid Cap Index or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Multifactor vs. Vanguard Mid Cap Index
Performance |
| Timeline |
| John Hancock Multifactor |
| Vanguard Mid Cap |
John Hancock and Vanguard Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Vanguard Mid
The main advantage of trading using opposite John Hancock and Vanguard Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Vanguard Mid 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 Vanguard Mid will offset losses from the drop in Vanguard Mid's long position.| John Hancock vs. John Hancock Multifactor | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. JPMorgan Diversified Return |
| Vanguard Mid vs. Vanguard Small Cap Index | Vanguard Mid vs. Vanguard Large Cap Index | Vanguard Mid vs. Vanguard Small Cap Growth | Vanguard Mid vs. Vanguard Small Cap Value |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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