Correlation Between John Hancock and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both John Hancock and Diamond Hill 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 Diamond Hill 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 Diamond Hill Large, you can compare the effects of market volatilities on John Hancock and Diamond Hill 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 Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Diamond Hill.
Diversification Opportunities for John Hancock and Diamond Hill
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Diamond is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Diamond Hill Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Large 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Large has no effect on the direction of John Hancock i.e., John Hancock and Diamond Hill go up and down completely randomly.
Pair Corralation between John Hancock and Diamond Hill
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.23 times more return on investment than Diamond Hill. However, John Hancock is 1.23 times more volatile than Diamond Hill Large. It trades about 0.14 of its potential returns per unit of risk. Diamond Hill Large is currently generating about 0.12 per unit of risk. If you would invest 2,493 in John Hancock Disciplined on September 12, 2024 and sell it today you would earn a total of 171.00 from holding John Hancock Disciplined or generate 6.86% 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 Disciplined vs. Diamond Hill Large
Performance |
| Timeline |
| John Hancock Disciplined |
| Diamond Hill Large |
John Hancock and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Diamond Hill
The main advantage of trading using opposite John Hancock and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| John Hancock vs. Ab Small Cap | John Hancock vs. Df Dent Small | John Hancock vs. Sp Smallcap 600 | John Hancock vs. Siit Small Mid |
| Diamond Hill vs. John Hancock Global | Diamond Hill vs. Edgewood Growth Fund | Diamond Hill vs. Hartford Schroders Emerging | Diamond Hill vs. Nuveen Intermediate Duration |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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