Correlation Between Bond Fund and John Hancock

Can any of the company-specific risk be diversified away by investing in both Bond Fund 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 Bond Fund and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bond Fund Of and John Hancock Disciplined, you can compare the effects of market volatilities on Bond Fund 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 Bond Fund with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and John Hancock.

Diversification Opportunities for Bond Fund and John Hancock

-0.48

Correlation Coefficient

Bond Fund  John Hancock

Very good diversification

The 3 months correlation between Bond and John is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of 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 Bond Fund 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 Bond Fund Of 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 Bond Fund i.e., Bond Fund and John Hancock go up and down completely randomly.

Pair Corralation between Bond Fund and John Hancock

Assuming the 90 days horizon Bond Fund Of is expected to generate 0.33 times more return on investment than John Hancock. However, Bond Fund Of is 3.05 times less risky than John Hancock. It trades about 0.15 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about -0.02 per unit of risk. If you would invest  1,099  in Bond Fund Of on December 27, 2024 and sell it today you would earn a total of  30.00  from holding Bond Fund Of or generate 2.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bond Fund Of  vs.  John Hancock Disciplined

Bond Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bond Fund Of are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Bond Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Disciplined

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Disciplined has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bond Fund and John Hancock

The main advantage of trading using opposite Bond Fund and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund 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.

The idea behind Bond Fund Of and John Hancock Disciplined pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.