Correlation Between John Hancock and Ariel Fund
Can any of the company-specific risk be diversified away by investing in both John Hancock and Ariel Fund 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 Fund 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 Fund Institutional, you can compare the effects of market volatilities on John Hancock and Ariel Fund 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 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Ariel Fund.
Diversification Opportunities for John Hancock and Ariel Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Ariel is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Ariel Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel Fund Institutional 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 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel Fund Institutional has no effect on the direction of John Hancock i.e., John Hancock and Ariel Fund go up and down completely randomly.
Pair Corralation between John Hancock and Ariel Fund
Assuming the 90 days horizon John Hancock is expected to generate 1.22 times less return on investment than Ariel Fund. But when comparing it to its historical volatility, John Hancock Disciplined is 1.46 times less risky than Ariel Fund. It trades about 0.12 of its potential returns per unit of risk. Ariel Fund Institutional is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,140 in Ariel Fund Institutional on September 1, 2024 and sell it today you would earn a total of 2,125 from holding Ariel Fund Institutional or generate 34.61% 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. Ariel Fund Institutional
Performance |
| Timeline |
| John Hancock Disciplined |
| Ariel Fund Institutional |
John Hancock and Ariel Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Ariel Fund
The main advantage of trading using opposite John Hancock and Ariel Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Ariel Fund 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 Fund will offset losses from the drop in Ariel Fund's 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 Fund vs. Calamos Dynamic Convertible | Ariel Fund vs. Columbia Vertible Securities | Ariel Fund vs. Advent Claymore Convertible | Ariel Fund vs. Gabelli Convertible And |
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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