Correlation Between John Hancock and Victory Tax-exempt
Can any of the company-specific risk be diversified away by investing in both John Hancock and Victory Tax-exempt 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 John Hancock and Victory Tax-exempt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Investment and Victory Tax Exempt Fund, you can compare the effects of market volatilities on John Hancock and Victory Tax-exempt 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 John Hancock with a short position of Victory Tax-exempt. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Victory Tax-exempt.
Diversification Opportunities for John Hancock and Victory Tax-exempt
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Victory is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Victory Tax Exempt Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Tax Exempt and John Hancock 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 John Hancock Investment are associated (or correlated) with Victory Tax-exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Tax Exempt has no effect on the direction of John Hancock i.e., John Hancock and Victory Tax-exempt go up and down completely randomly.
Pair Corralation between John Hancock and Victory Tax-exempt
Assuming the 90 days horizon John Hancock is expected to generate 1.3 times less return on investment than Victory Tax-exempt. In addition to that, John Hancock is 1.32 times more volatile than Victory Tax Exempt Fund. It trades about 0.04 of its total potential returns per unit of risk. Victory Tax Exempt Fund is currently generating about 0.07 per unit of volatility. If you would invest 796.00 in Victory Tax Exempt Fund on September 2, 2024 and sell it today you would earn a total of 69.00 from holding Victory Tax Exempt Fund or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Investment vs. Victory Tax Exempt Fund
Performance |
| Timeline |
| John Hancock Investment |
| Victory Tax Exempt |
John Hancock and Victory Tax-exempt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Victory Tax-exempt
The main advantage of trading using opposite John Hancock and Victory Tax-exempt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Victory Tax-exempt 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 Victory Tax-exempt will offset losses from the drop in Victory Tax-exempt's long position.| John Hancock vs. L Abbett Growth | John Hancock vs. Kinetics Small Cap | John Hancock vs. Touchstone Small Cap | John Hancock vs. Ab Small Cap |
| Victory Tax-exempt vs. Amg Managers Centersquare | Victory Tax-exempt vs. Guggenheim Risk Managed | Victory Tax-exempt vs. Virtus Real Estate | Victory Tax-exempt vs. Deutsche Real Estate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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