Correlation Between John Hancock and Hartford International
Can any of the company-specific risk be diversified away by investing in both John Hancock and Hartford International 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 Hartford International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Disciplined and The Hartford International, you can compare the effects of market volatilities on John Hancock and Hartford International 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 Hartford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Hartford International.
Diversification Opportunities for John Hancock and Hartford International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and Hartford is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford International 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 Disciplined are associated (or correlated) with Hartford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford International has no effect on the direction of John Hancock i.e., John Hancock and Hartford International go up and down completely randomly.
Pair Corralation between John Hancock and Hartford International
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.37 times more return on investment than Hartford International. However, John Hancock is 1.37 times more volatile than The Hartford International. It trades about 0.25 of its potential returns per unit of risk. The Hartford International is currently generating about -0.13 per unit of risk. If you would invest 2,704 in John Hancock Disciplined on September 4, 2024 and sell it today you would earn a total of 157.00 from holding John Hancock Disciplined or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. The Hartford International
Performance |
| Timeline |
| John Hancock Disciplined |
| Hartford International |
John Hancock and Hartford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Hartford International
The main advantage of trading using opposite John Hancock and Hartford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Hartford International 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 Hartford International will offset losses from the drop in Hartford International'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 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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