Correlation Between John Hancock and Growth Equity
Can any of the company-specific risk be diversified away by investing in both John Hancock and Growth Equity 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 Growth Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Investment and Growth Equity Investor, you can compare the effects of market volatilities on John Hancock and Growth Equity 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 Growth Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Growth Equity.
Diversification Opportunities for John Hancock and Growth Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Growth Equity Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Equity Investor 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 Investment are associated (or correlated) with Growth Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Equity Investor has no effect on the direction of John Hancock i.e., John Hancock and Growth Equity go up and down completely randomly.
Pair Corralation between John Hancock and Growth Equity
Assuming the 90 days horizon John Hancock Investment is expected to generate 0.76 times more return on investment than Growth Equity. However, John Hancock Investment is 1.31 times less risky than Growth Equity. It trades about 0.25 of its potential returns per unit of risk. Growth Equity Investor is currently generating about 0.17 per unit of risk. If you would invest 7,877 in John Hancock Investment on August 31, 2024 and sell it today you would earn a total of 375.00 from holding John Hancock Investment or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
John Hancock Investment vs. Growth Equity Investor
Performance |
| Timeline |
| John Hancock Investment |
| Growth Equity Investor |
John Hancock and Growth Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Growth Equity
The main advantage of trading using opposite John Hancock and Growth Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Growth Equity 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 Growth Equity will offset losses from the drop in Growth Equity's long position.| John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard 500 Index | John Hancock vs. Vanguard Total Stock | John Hancock vs. Vanguard Total Stock |
| Growth Equity vs. John Hancock Investment | Growth Equity vs. American Mutual Fund | Growth Equity vs. Dodge Cox Stock | Growth Equity vs. Virtus Nfj Large Cap |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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