Correlation Between John Hancock and Alger Health
Can any of the company-specific risk be diversified away by investing in both John Hancock and Alger Health 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 John Hancock and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Municipal and Alger Health Sciences, you can compare the effects of market volatilities on John Hancock and Alger Health 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 John Hancock with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Alger Health.
Diversification Opportunities for John Hancock and Alger Health
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Alger is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Municipal and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences and John Hancock 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 John Hancock Municipal are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of John Hancock i.e., John Hancock and Alger Health go up and down completely randomly.
Pair Corralation between John Hancock and Alger Health
Assuming the 90 days horizon John Hancock is expected to generate 2.26 times less return on investment than Alger Health. But when comparing it to its historical volatility, John Hancock Municipal is 5.88 times less risky than Alger Health. It trades about 0.39 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Alger Health Sciences on March 29, 2025 and sell it today you would earn a total of 20.00 from holding Alger Health Sciences or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Municipal vs. Alger Health Sciences
Performance |
| Timeline |
| John Hancock Municipal |
| Alger Health Sciences |
John Hancock and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Alger Health
The main advantage of trading using opposite John Hancock and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| John Hancock vs. Schwab Government Money | John Hancock vs. Us Government Securities | John Hancock vs. Columbia Government Mortgage | John Hancock vs. Inverse Government Long |
| Alger Health vs. Franklin Adjustable Government | Alger Health vs. California Municipal Portfolio | Alger Health vs. Inverse Government Long | Alger Health vs. John Hancock Municipal |
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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