Correlation Between College Retirement and John Hancock
Can any of the company-specific risk be diversified away by investing in both College Retirement 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 College Retirement and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and John Hancock Enduring, you can compare the effects of market volatilities on College Retirement 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 College Retirement with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and John Hancock.
Diversification Opportunities for College Retirement and John Hancock
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between College and John is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and John Hancock Enduring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Enduring and College Retirement 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 College Retirement Equities 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 Enduring has no effect on the direction of College Retirement i.e., College Retirement and John Hancock go up and down completely randomly.
Pair Corralation between College Retirement and John Hancock
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 0.82 times more return on investment than John Hancock. However, College Retirement Equities is 1.22 times less risky than John Hancock. It trades about 0.12 of its potential returns per unit of risk. John Hancock Enduring is currently generating about -0.19 per unit of risk. If you would invest 51,662 in College Retirement Equities on September 12, 2024 and sell it today you would earn a total of 738.00 from holding College Retirement Equities or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. John Hancock Enduring
Performance |
| Timeline |
| College Retirement |
| John Hancock Enduring |
College Retirement and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and John Hancock
The main advantage of trading using opposite College Retirement and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement 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.| College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
| John Hancock vs. Strategic Allocation Moderate | John Hancock vs. Wilmington Trust Retirement | John Hancock vs. College Retirement Equities | John Hancock vs. Transamerica Cleartrack Retirement |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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