Correlation Between Nova Fund and John Hancock
Can any of the company-specific risk be diversified away by investing in both Nova Fund 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 Nova Fund and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Fund Class and John Hancock Enduring, you can compare the effects of market volatilities on Nova Fund 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 Nova Fund with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Fund and John Hancock.
Diversification Opportunities for Nova Fund and John Hancock
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nova and John is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class 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 Nova Fund 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 Nova Fund Class 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 Nova Fund i.e., Nova Fund and John Hancock go up and down completely randomly.
Pair Corralation between Nova Fund and John Hancock
Assuming the 90 days horizon Nova Fund Class is expected to generate 1.86 times more return on investment than John Hancock. However, Nova Fund is 1.86 times more volatile than John Hancock Enduring. It trades about 0.35 of its potential returns per unit of risk. John Hancock Enduring is currently generating about 0.27 per unit of risk. If you would invest 10,056 in Nova Fund Class on September 1, 2024 and sell it today you would earn a total of 851.00 from holding Nova Fund Class or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Fund Class vs. John Hancock Enduring
Performance |
| Timeline |
| Nova Fund Class |
| John Hancock Enduring |
Nova Fund and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Fund and John Hancock
The main advantage of trading using opposite Nova Fund and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Fund 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.| Nova Fund vs. Touchstone Ultra Short | Nova Fund vs. Angel Oak Ultrashort | Nova Fund vs. Goldman Sachs Short Term | Nova Fund vs. Siit Ultra Short |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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