Correlation Between John Hancock and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both John Hancock and Harding Loevner 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 Harding Loevner 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 Harding Loevner Institutional, you can compare the effects of market volatilities on John Hancock and Harding Loevner 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 Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Harding Loevner.
Diversification Opportunities for John Hancock and Harding Loevner
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between John and Harding is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Harding Loevner Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inst 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 Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inst has no effect on the direction of John Hancock i.e., John Hancock and Harding Loevner go up and down completely randomly.
Pair Corralation between John Hancock and Harding Loevner
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.34 times more return on investment than Harding Loevner. However, John Hancock is 1.34 times more volatile than Harding Loevner Institutional. It trades about 0.23 of its potential returns per unit of risk. Harding Loevner Institutional is currently generating about -0.19 per unit of risk. If you would invest 2,609 in John Hancock Disciplined on August 30, 2024 and sell it today you would earn a total of 142.00 from holding John Hancock Disciplined or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. Harding Loevner Institutional
Performance |
| Timeline |
| John Hancock Disciplined |
| Harding Loevner Inst |
John Hancock and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Harding Loevner
The main advantage of trading using opposite John Hancock and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| John Hancock vs. Dreyfus Government Cash | John Hancock vs. Us Government Securities | John Hancock vs. Government Securities Fund | John Hancock vs. Federated Government Ultrashort |
| Harding Loevner vs. Harding Loevner International | Harding Loevner vs. Victory Trivalent International | Harding Loevner vs. John Hancock Disciplined | Harding Loevner vs. Causeway Emerging Markets |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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