Correlation Between John Hancock and Heartland Value
Can any of the company-specific risk be diversified away by investing in both John Hancock and Heartland Value 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 Heartland Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Ii and Heartland Value Plus, you can compare the effects of market volatilities on John Hancock and Heartland Value 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 Heartland Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Heartland Value.
Diversification Opportunities for John Hancock and Heartland Value
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Heartland is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Heartland Value Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value Plus 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 Ii are associated (or correlated) with Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value Plus has no effect on the direction of John Hancock i.e., John Hancock and Heartland Value go up and down completely randomly.
Pair Corralation between John Hancock and Heartland Value
Assuming the 90 days horizon John Hancock Ii is expected to generate 1.05 times more return on investment than Heartland Value. However, John Hancock is 1.05 times more volatile than Heartland Value Plus. It trades about 0.07 of its potential returns per unit of risk. Heartland Value Plus is currently generating about -0.01 per unit of risk. If you would invest 1,895 in John Hancock Ii on September 20, 2024 and sell it today you would earn a total of 21.00 from holding John Hancock Ii or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
John Hancock Ii vs. Heartland Value Plus
Performance |
| Timeline |
| John Hancock Ii |
| Heartland Value Plus |
John Hancock and Heartland Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Heartland Value
The main advantage of trading using opposite John Hancock and Heartland Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Heartland Value 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 Heartland Value will offset losses from the drop in Heartland Value'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 |
| Heartland Value vs. Large Cap Fund | Heartland Value vs. Permanent Portfolio Class | Heartland Value vs. Aquagold International | Heartland Value vs. Morningstar Unconstrained Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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