Correlation Between Virtus Kar and John Hancock
Can any of the company-specific risk be diversified away by investing in both Virtus Kar 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 Virtus Kar and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Kar Small Cap and John Hancock Financial, you can compare the effects of market volatilities on Virtus Kar 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 Virtus Kar with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and John Hancock.
Diversification Opportunities for Virtus Kar and John Hancock
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and John is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Virtus Kar 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 Virtus Kar 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 Financial has no effect on the direction of Virtus Kar i.e., Virtus Kar and John Hancock go up and down completely randomly.
Pair Corralation between Virtus Kar and John Hancock
Assuming the 90 days horizon Virtus Kar Small Cap is expected to generate 0.86 times more return on investment than John Hancock. However, Virtus Kar Small Cap is 1.17 times less risky than John Hancock. It trades about -0.05 of its potential returns per unit of risk. John Hancock Financial is currently generating about -0.12 per unit of risk. If you would invest 2,829 in Virtus Kar Small Cap on September 19, 2024 and sell it today you would lose (27.00) from holding Virtus Kar Small Cap or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Kar Small Cap vs. John Hancock Financial
Performance |
| Timeline |
| Virtus Kar Small |
| John Hancock Financial |
Virtus Kar and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Kar and John Hancock
The main advantage of trading using opposite Virtus Kar and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Kar 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.| Virtus Kar vs. T Rowe Price | Virtus Kar vs. Dreyfusstandish Global Fixed | Virtus Kar vs. Ishares Municipal Bond | Virtus Kar vs. The National Tax Free |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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