Correlation Between John Hancock and New World
Can any of the company-specific risk be diversified away by investing in both John Hancock and New World 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 New World 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 New World Fund, you can compare the effects of market volatilities on John Hancock and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and New World.
Diversification Opportunities for John Hancock and New World
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and New is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of John Hancock i.e., John Hancock and New World go up and down completely randomly.
Pair Corralation between John Hancock and New World
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 1.66 times more return on investment than New World. However, John Hancock is 1.66 times more volatile than New World Fund. It trades about 0.23 of its potential returns per unit of risk. New World Fund is currently generating about -0.2 per unit of risk. If you would invest 3,075 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 172.00 from holding John Hancock Disciplined or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. New World Fund
Performance |
| Timeline |
| John Hancock Disciplined |
| New World Fund |
John Hancock and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and New World
The main advantage of trading using opposite John Hancock and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| John Hancock vs. New World Fund | John Hancock vs. Bond Fund Of | John Hancock vs. Washington Mutual Investors | John Hancock vs. Europacific Growth Fund |
| New World vs. Goldman Sachs Large | New World vs. William Blair Large | New World vs. Siit Large Cap | New World vs. Legg Mason Bw |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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