Correlation Between John Hancock and Materials Portfolio
Can any of the company-specific risk be diversified away by investing in both John Hancock and Materials Portfolio 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 Materials Portfolio 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 Materials Portfolio Fidelity, you can compare the effects of market volatilities on John Hancock and Materials Portfolio 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 Materials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Materials Portfolio.
Diversification Opportunities for John Hancock and Materials Portfolio
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Materials is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Materials Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials 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 Materials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Portfolio has no effect on the direction of John Hancock i.e., John Hancock and Materials Portfolio go up and down completely randomly.
Pair Corralation between John Hancock and Materials Portfolio
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 0.83 times more return on investment than Materials Portfolio. However, John Hancock Disciplined is 1.2 times less risky than Materials Portfolio. It trades about 0.08 of its potential returns per unit of risk. Materials Portfolio Fidelity is currently generating about 0.03 per unit of risk. If you would invest 2,444 in John Hancock Disciplined on September 12, 2024 and sell it today you would earn a total of 542.00 from holding John Hancock Disciplined or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
John Hancock Disciplined vs. Materials Portfolio Fidelity
Performance |
| Timeline |
| John Hancock Disciplined |
| Materials Portfolio |
John Hancock and Materials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Materials Portfolio
The main advantage of trading using opposite John Hancock and Materials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Materials Portfolio 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 Materials Portfolio will offset losses from the drop in Materials Portfolio's long position.| John Hancock vs. Materials Portfolio Fidelity | John Hancock vs. Acm Dynamic Opportunity | John Hancock vs. Rbc Microcap Value | John Hancock vs. Aam Select Income |
| Materials Portfolio vs. T Rowe Price | Materials Portfolio vs. Gmo Trust | Materials Portfolio vs. Gmo Resources | Materials Portfolio vs. Materials Portfolio Fidelity |
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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