Correlation Between Financial Industries and John Hancock
Can any of the company-specific risk be diversified away by investing in both Financial Industries 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 Financial Industries and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and John Hancock Strategic, you can compare the effects of market volatilities on Financial Industries 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 Financial Industries with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and John Hancock.
Diversification Opportunities for Financial Industries and John Hancock
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and John is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and John Hancock Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Strategic and Financial Industries 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 Financial Industries Fund 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 Strategic has no effect on the direction of Financial Industries i.e., Financial Industries and John Hancock go up and down completely randomly.
Pair Corralation between Financial Industries and John Hancock
Assuming the 90 days horizon Financial Industries is expected to generate 2.35 times less return on investment than John Hancock. In addition to that, Financial Industries is 1.12 times more volatile than John Hancock Strategic. It trades about 0.08 of its total potential returns per unit of risk. John Hancock Strategic is currently generating about 0.22 per unit of volatility. If you would invest 2,714 in John Hancock Strategic on June 4, 2025 and sell it today you would earn a total of 281.00 from holding John Hancock Strategic or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. John Hancock Strategic
Performance |
| Timeline |
| Financial Industries |
| John Hancock Strategic |
Financial Industries and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and John Hancock
The main advantage of trading using opposite Financial Industries and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries 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.| Financial Industries vs. Gabelli Convertible And | Financial Industries vs. Allianzgi Convertible Income | Financial Industries vs. Virtus Convertible | Financial Industries vs. Advent Claymore Convertible |
| John Hancock vs. Auer Growth Fund | John Hancock vs. Growth Fund C | John Hancock vs. Lebenthal Lisanti Small | John Hancock vs. Eagle Growth Income |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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