Correlation Between John Hancock and Dimensional Retirement
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dimensional Retirement 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 Dimensional Retirement 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 Dimensional Retirement Income, you can compare the effects of market volatilities on John Hancock and Dimensional Retirement 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 Dimensional Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dimensional Retirement.
Diversification Opportunities for John Hancock and Dimensional Retirement
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Dimensional is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Dimensional Retirement Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Retirement 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 Dimensional Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Retirement has no effect on the direction of John Hancock i.e., John Hancock and Dimensional Retirement go up and down completely randomly.
Pair Corralation between John Hancock and Dimensional Retirement
Assuming the 90 days horizon John Hancock Investment is expected to generate 3.87 times more return on investment than Dimensional Retirement. However, John Hancock is 3.87 times more volatile than Dimensional Retirement Income. It trades about 0.35 of its potential returns per unit of risk. Dimensional Retirement Income is currently generating about 0.32 per unit of risk. If you would invest 7,806 in John Hancock Investment on September 3, 2024 and sell it today you would earn a total of 446.00 from holding John Hancock Investment or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Investment vs. Dimensional Retirement Income
Performance |
| Timeline |
| John Hancock Investment |
| Dimensional Retirement |
John Hancock and Dimensional Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Dimensional Retirement
The main advantage of trading using opposite John Hancock and Dimensional Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dimensional Retirement 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 Dimensional Retirement will offset losses from the drop in Dimensional Retirement's long position.| John Hancock vs. Calamos Dynamic Convertible | John Hancock vs. Limited Term Tax | John Hancock vs. Touchstone Premium Yield | John Hancock vs. Versatile Bond Portfolio |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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