Correlation Between L Abbett and John Hancock
Can any of the company-specific risk be diversified away by investing in both L Abbett 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 L Abbett and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Growth and John Hancock Investment, you can compare the effects of market volatilities on L Abbett 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 L Abbett with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and John Hancock.
Diversification Opportunities for L Abbett and John Hancock
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGLSX and John is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and John Hancock Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investment and L Abbett 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 L Abbett Growth 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 Investment has no effect on the direction of L Abbett i.e., L Abbett and John Hancock go up and down completely randomly.
Pair Corralation between L Abbett and John Hancock
Assuming the 90 days horizon L Abbett Growth is expected to generate 3.33 times more return on investment than John Hancock. However, L Abbett is 3.33 times more volatile than John Hancock Investment. It trades about 0.11 of its potential returns per unit of risk. John Hancock Investment is currently generating about 0.06 per unit of risk. If you would invest 3,064 in L Abbett Growth on September 3, 2024 and sell it today you would earn a total of 1,737 from holding L Abbett Growth or generate 56.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. John Hancock Investment
Performance |
| Timeline |
| L Abbett Growth |
| John Hancock Investment |
L Abbett and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and John Hancock
The main advantage of trading using opposite L Abbett and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett 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.| L Abbett vs. Gmo High Yield | L Abbett vs. Guggenheim High Yield | L Abbett vs. Siit High Yield | L Abbett vs. Pgim High Yield |
| John Hancock vs. Sprott Gold Equity | John Hancock vs. Global Gold Fund | John Hancock vs. Gabelli Gold Fund | John Hancock vs. Vy Goldman Sachs |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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