Correlation Between Vanguard Value and John Hancock
Can any of the company-specific risk be diversified away by investing in both Vanguard Value 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 Value 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 Value Index and John Hancock Disciplined, you can compare the effects of market volatilities on Vanguard Value 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 Value with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and John Hancock.
Diversification Opportunities for Vanguard Value and John Hancock
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and John is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index 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 Vanguard Value 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 Value Index 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 Vanguard Value i.e., Vanguard Value and John Hancock go up and down completely randomly.
Pair Corralation between Vanguard Value and John Hancock
Assuming the 90 days horizon Vanguard Value Index is expected to generate 0.89 times more return on investment than John Hancock. However, Vanguard Value Index is 1.13 times less risky than John Hancock. It trades about -0.1 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about -0.22 per unit of risk. If you would invest 6,988 in Vanguard Value Index on September 12, 2024 and sell it today you would lose (75.00) from holding Vanguard Value Index or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Value Index vs. John Hancock Disciplined
Performance |
| Timeline |
| Vanguard Value Index |
| John Hancock Disciplined |
Vanguard Value and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and John Hancock
The main advantage of trading using opposite Vanguard Value and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value 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 Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| John Hancock vs. Vanguard Value Index | John Hancock vs. Dodge Cox Stock | John Hancock vs. American Mutual Fund | John Hancock vs. American Funds American |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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