Correlation Between John Hancock and Total Market
Can any of the company-specific risk be diversified away by investing in both John Hancock and Total Market 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 Total Market 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 Total Market Portfolio, you can compare the effects of market volatilities on John Hancock and Total Market 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 Total Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Total Market.
Diversification Opportunities for John Hancock and Total Market
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Total is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Total Market Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Market Portfolio 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 Total Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Market Portfolio has no effect on the direction of John Hancock i.e., John Hancock and Total Market go up and down completely randomly.
Pair Corralation between John Hancock and Total Market
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 0.88 times more return on investment than Total Market. However, John Hancock Disciplined is 1.14 times less risky than Total Market. It trades about 0.02 of its potential returns per unit of risk. Total Market Portfolio is currently generating about 0.01 per unit of risk. If you would invest 2,413 in John Hancock Disciplined on November 27, 2024 and sell it today you would earn a total of 179.00 from holding John Hancock Disciplined or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. Total Market Portfolio
Performance |
| Timeline |
| John Hancock Disciplined |
| Total Market Portfolio |
John Hancock and Total Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Total Market
The main advantage of trading using opposite John Hancock and Total Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Total Market 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 Total Market will offset losses from the drop in Total Market'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 |
| Total Market vs. Edgewood Growth Fund | Total Market vs. Johcm International Select | Total Market vs. Invesco Senior Loan | Total Market vs. Doubleline Shiller Enhanced |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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