Correlation Between Clearbridge Large and John Hancock
Can any of the company-specific risk be diversified away by investing in both Clearbridge Large 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 Clearbridge Large and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Large Cap and John Hancock Disciplined, you can compare the effects of market volatilities on Clearbridge Large 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 Clearbridge Large with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Large and John Hancock.
Diversification Opportunities for Clearbridge Large and John Hancock
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large 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 Clearbridge Large 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 Clearbridge Large 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 Clearbridge Large i.e., Clearbridge Large and John Hancock go up and down completely randomly.
Pair Corralation between Clearbridge Large and John Hancock
Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 1.18 times more return on investment than John Hancock. However, Clearbridge Large is 1.18 times more volatile than John Hancock Disciplined. It trades about 0.1 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.1 per unit of risk. If you would invest 5,381 in Clearbridge Large Cap on August 26, 2024 and sell it today you would earn a total of 2,513 from holding Clearbridge Large Cap or generate 46.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Large Cap vs. John Hancock Disciplined
Performance |
| Timeline |
| Clearbridge Large Cap |
| John Hancock Disciplined |
Clearbridge Large and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Large and John Hancock
The main advantage of trading using opposite Clearbridge Large and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Large 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.| Clearbridge Large vs. Franklin Mutual Beacon | Clearbridge Large vs. Templeton Developing Markets | Clearbridge Large vs. Franklin Mutual Global | Clearbridge Large vs. Franklin Mutual Global |
| John Hancock vs. New World Fund | John Hancock vs. Bond Fund Of | John Hancock vs. Washington Mutual Investors | John Hancock vs. Europacific Growth Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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