Correlation Between Needham Aggressive and John Hancock
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive 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 Needham Aggressive and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Aggressive Growth and John Hancock Mid, you can compare the effects of market volatilities on Needham Aggressive 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 Needham Aggressive with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and John Hancock.
Diversification Opportunities for Needham Aggressive and John Hancock
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and John is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and John Hancock Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Mid and Needham Aggressive 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 Needham Aggressive 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 Mid has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and John Hancock go up and down completely randomly.
Pair Corralation between Needham Aggressive and John Hancock
Assuming the 90 days horizon Needham Aggressive is expected to generate 1.0 times less return on investment than John Hancock. In addition to that, Needham Aggressive is 1.08 times more volatile than John Hancock Mid. It trades about 0.17 of its total potential returns per unit of risk. John Hancock Mid is currently generating about 0.19 per unit of volatility. If you would invest 1,852 in John Hancock Mid on September 13, 2024 and sell it today you would earn a total of 93.00 from holding John Hancock Mid or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. John Hancock Mid
Performance |
| Timeline |
| Needham Aggressive Growth |
| John Hancock Mid |
Needham Aggressive and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and John Hancock
The main advantage of trading using opposite Needham Aggressive and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive 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.| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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