Correlation Between Vanguard Dividend and John Hancock
Can any of the company-specific risk be diversified away by investing in both Vanguard Dividend 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 Vanguard Dividend and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Dividend Appreciation and John Hancock Multifactor, you can compare the effects of market volatilities on Vanguard Dividend 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 Vanguard Dividend with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Dividend and John Hancock.
Diversification Opportunities for Vanguard Dividend and John Hancock
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and John is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Dividend Appreciation and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Vanguard Dividend 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 Vanguard Dividend Appreciation 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 Multifactor has no effect on the direction of Vanguard Dividend i.e., Vanguard Dividend and John Hancock go up and down completely randomly.
Pair Corralation between Vanguard Dividend and John Hancock
Considering the 90-day investment horizon Vanguard Dividend is expected to generate 1.17 times less return on investment than John Hancock. But when comparing it to its historical volatility, Vanguard Dividend Appreciation is 1.16 times less risky than John Hancock. It trades about 0.13 of its potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,231 in John Hancock Multifactor on September 1, 2024 and sell it today you would earn a total of 2,094 from holding John Hancock Multifactor or generate 40.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Dividend Appreciation vs. John Hancock Multifactor
Performance |
| Timeline |
| Vanguard Dividend |
| John Hancock Multifactor |
Vanguard Dividend and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Dividend and John Hancock
The main advantage of trading using opposite Vanguard Dividend and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Dividend 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.| Vanguard Dividend vs. Vanguard High Dividend | Vanguard Dividend vs. Vanguard Real Estate | Vanguard Dividend vs. Schwab Dividend Equity | Vanguard Dividend vs. Vanguard Growth Index |
| John Hancock vs. John Hancock Multifactor | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. iShares Equity Factor | John Hancock vs. John Hancock Multifactor |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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