Correlation Between John Hancock and Large Cap
Can any of the company-specific risk be diversified away by investing in both John Hancock and Large Cap 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 Large Cap 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 Large Cap Growth Profund, you can compare the effects of market volatilities on John Hancock and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Large Cap.
Diversification Opportunities for John Hancock and Large Cap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Large is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap 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 Investment are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of John Hancock i.e., John Hancock and Large Cap go up and down completely randomly.
Pair Corralation between John Hancock and Large Cap
Assuming the 90 days horizon John Hancock is expected to generate 1.11 times less return on investment than Large Cap. But when comparing it to its historical volatility, John Hancock Investment is 1.06 times less risky than Large Cap. It trades about 0.09 of its potential returns per unit of risk. Large Cap Growth Profund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,919 in Large Cap Growth Profund on September 2, 2024 and sell it today you would earn a total of 1,602 from holding Large Cap Growth Profund or generate 54.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Investment vs. Large Cap Growth Profund
Performance |
| Timeline |
| John Hancock Investment |
| Large Cap Growth |
John Hancock and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Large Cap
The main advantage of trading using opposite John Hancock and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap'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 |
| Large Cap vs. Short Real Estate | Large Cap vs. Ultrashort Mid Cap Profund | Large Cap vs. Technology Ultrasector Profund | Large Cap vs. Technology Ultrasector Profund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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