Correlation Between Lord Abbett and John Hancock
Can any of the company-specific risk be diversified away by investing in both Lord 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 Lord 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 Lord Abbett Small and John Hancock Global, you can compare the effects of market volatilities on Lord 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 Lord Abbett with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and John Hancock.
Diversification Opportunities for Lord Abbett and John Hancock
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and John is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Lord 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 Lord Abbett Small 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 Global has no effect on the direction of Lord Abbett i.e., Lord Abbett and John Hancock go up and down completely randomly.
Pair Corralation between Lord Abbett and John Hancock
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.23 times more return on investment than John Hancock. However, Lord Abbett is 1.23 times more volatile than John Hancock Global. It trades about 0.07 of its potential returns per unit of risk. John Hancock Global is currently generating about 0.05 per unit of risk. If you would invest 1,754 in Lord Abbett Small on September 3, 2024 and sell it today you would earn a total of 729.00 from holding Lord Abbett Small or generate 41.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. John Hancock Global
Performance |
| Timeline |
| Lord Abbett Small |
| John Hancock Global |
Lord Abbett and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and John Hancock
The main advantage of trading using opposite Lord Abbett and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord 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.| Lord Abbett vs. Vanguard Small Cap Value | Lord Abbett vs. Vanguard Small Cap Value | Lord Abbett vs. Us Small Cap | Lord Abbett vs. Us Targeted Value |
| John Hancock vs. Dunham Large Cap | John Hancock vs. Qs Large Cap | John Hancock vs. Qs Large Cap | John Hancock vs. Qs Large Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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