Correlation Between Ab Small and John Hancock
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and John Hancock Disciplined, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and John Hancock.
Diversification Opportunities for Ab Small and John Hancock
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAIX and John is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Ab Small 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 Ab Small Cap 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 Disciplined has no effect on the direction of Ab Small i.e., Ab Small and John Hancock go up and down completely randomly.
Pair Corralation between Ab Small and John Hancock
Assuming the 90 days horizon Ab Small Cap is expected to generate 2.11 times more return on investment than John Hancock. However, Ab Small is 2.11 times more volatile than John Hancock Disciplined. It trades about -0.02 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about -0.18 per unit of risk. If you would invest 7,794 in Ab Small Cap on September 13, 2024 and sell it today you would lose (45.00) from holding Ab Small Cap or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. John Hancock Disciplined
Performance |
| Timeline |
| Ab Small Cap |
| John Hancock Disciplined |
Ab Small and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and John Hancock
The main advantage of trading using opposite Ab Small and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Health Biotchnology Portfolio | Ab Small vs. Prudential Health Sciences | Ab Small vs. Delaware Healthcare Fund | Ab Small vs. Baillie Gifford Health |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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