Correlation Between Kinetics Small and John Hancock
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and John Hancock 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 Kinetics Small and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and John Hancock Esg, you can compare the effects of market volatilities on Kinetics Small and John Hancock 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 Kinetics Small with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and John Hancock.
Diversification Opportunities for Kinetics Small and John Hancock
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinetics and John is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg and Kinetics Small 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 Kinetics Small Cap are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Esg has no effect on the direction of Kinetics Small i.e., Kinetics Small and John Hancock go up and down completely randomly.
Pair Corralation between Kinetics Small and John Hancock
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.94 times more return on investment than John Hancock. However, Kinetics Small is 1.94 times more volatile than John Hancock Esg. It trades about 0.08 of its potential returns per unit of risk. John Hancock Esg is currently generating about 0.06 per unit of risk. If you would invest 11,215 in Kinetics Small Cap on November 27, 2024 and sell it today you would earn a total of 7,811 from holding Kinetics Small Cap or generate 69.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. John Hancock Esg
Performance |
| Timeline |
| Kinetics Small Cap |
| John Hancock Esg |
Kinetics Small and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and John Hancock
The main advantage of trading using opposite Kinetics Small and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Kinetics Small vs. Wealthbuilder Moderate Balanced | Kinetics Small vs. Moderate Strategy Fund | Kinetics Small vs. Blackrock Moderate Prepared | Kinetics Small vs. Great West Moderately Servative |
| John Hancock vs. Principal Lifetime Hybrid | John Hancock vs. Dodge Cox Stock | John Hancock vs. Guidemark Large Cap | John Hancock vs. Balanced Allocation 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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