Correlation Between John Hancock and Ariel Focus
Can any of the company-specific risk be diversified away by investing in both John Hancock and Ariel Focus 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 Ariel Focus 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 Ariel Focus Fund, you can compare the effects of market volatilities on John Hancock and Ariel Focus 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 Ariel Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ariel Focus.
Diversification Opportunities for John Hancock and Ariel Focus
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Ariel is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Ariel Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel Focus Fund 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 Ariel Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel Focus Fund has no effect on the direction of John Hancock i.e., John Hancock and Ariel Focus go up and down completely randomly.
Pair Corralation between John Hancock and Ariel Focus
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 0.89 times more return on investment than Ariel Focus. However, John Hancock Disciplined is 1.13 times less risky than Ariel Focus. It trades about 0.31 of its potential returns per unit of risk. Ariel Focus Fund is currently generating about 0.27 per unit of risk. If you would invest 2,871 in John Hancock Disciplined on September 1, 2024 and sell it today you would earn a total of 204.00 from holding John Hancock Disciplined or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
John Hancock Disciplined vs. Ariel Focus Fund
Performance |
| Timeline |
| John Hancock Disciplined |
| Ariel Focus Fund |
John Hancock and Ariel Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Ariel Focus
The main advantage of trading using opposite John Hancock and Ariel Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ariel Focus 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 Ariel Focus will offset losses from the drop in Ariel Focus' long position.| John Hancock vs. John Hancock Disciplined | John Hancock vs. John Hancock Bond | John Hancock vs. Us Global Leaders | John Hancock vs. Mfs International Value |
| Ariel Focus vs. Ariel Fund Institutional | Ariel Focus vs. Ariel Focus Fund | Ariel Focus vs. Ariel Fund Investor | Ariel Focus vs. Ariel Global Fund |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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