Correlation Between Vanguard Total and John Hancock
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Total 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 Total Stock and John Hancock Variable, you can compare the effects of market volatilities on Vanguard Total 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 Total with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and John Hancock.
Diversification Opportunities for Vanguard Total and John Hancock
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and John is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and Vanguard Total 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 Total Stock 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 Variable has no effect on the direction of Vanguard Total i.e., Vanguard Total and John Hancock go up and down completely randomly.
Pair Corralation between Vanguard Total and John Hancock
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 0.75 times more return on investment than John Hancock. However, Vanguard Total Stock is 1.34 times less risky than John Hancock. It trades about 0.11 of its potential returns per unit of risk. John Hancock Variable is currently generating about 0.03 per unit of risk. If you would invest 9,500 in Vanguard Total Stock on November 27, 2024 and sell it today you would earn a total of 4,899 from holding Vanguard Total Stock or generate 51.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. John Hancock Variable
Performance |
| Timeline |
| Vanguard Total Stock |
| John Hancock Variable |
Vanguard Total and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and John Hancock
The main advantage of trading using opposite Vanguard Total and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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 Total vs. Moderate Strategy Fund | Vanguard Total vs. Transamerica Cleartrack Retirement | Vanguard Total vs. American Funds Retirement | Vanguard Total vs. Voya Retirement Growth |
| John Hancock vs. Manning Napier Diversified | John Hancock vs. Diversified Bond Fund | John Hancock vs. Guidepath Conservative Income | John Hancock vs. Prudential Core Conservative |
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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