Correlation Between Qs Defensive and John Hancock
Can any of the company-specific risk be diversified away by investing in both Qs Defensive 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 Qs Defensive and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qs Defensive Growth and John Hancock Investment, you can compare the effects of market volatilities on Qs Defensive 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 Qs Defensive with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Defensive and John Hancock.
Diversification Opportunities for Qs Defensive and John Hancock
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LMLRX and John is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Qs Defensive 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 Qs Defensive 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 Qs Defensive 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 Qs Defensive i.e., Qs Defensive and John Hancock go up and down completely randomly.
Pair Corralation between Qs Defensive and John Hancock
Assuming the 90 days horizon Qs Defensive Growth is expected to generate 1.12 times more return on investment than John Hancock. However, Qs Defensive is 1.12 times more volatile than John Hancock Investment. It trades about 0.12 of its potential returns per unit of risk. John Hancock Investment is currently generating about -0.04 per unit of risk. If you would invest 1,250 in Qs Defensive Growth on November 3, 2024 and sell it today you would earn a total of 68.00 from holding Qs Defensive Growth or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qs Defensive Growth vs. John Hancock Investment
Performance |
| Timeline |
| Qs Defensive Growth |
| John Hancock Investment |
Qs Defensive and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qs Defensive and John Hancock
The main advantage of trading using opposite Qs Defensive and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Defensive 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.| Qs Defensive vs. Putnam Global Financials | Qs Defensive vs. Transamerica Financial Life | Qs Defensive vs. Prudential Financial Services | Qs Defensive vs. Fidelity Advisor Financial |
| John Hancock vs. Dunham Porategovernment Bond | John Hancock vs. Wesmark Government Bond | John Hancock vs. Federated Government Income | John Hancock vs. Schwab Government Money |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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