Correlation Between John Hancock and Leuthold Global

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

By analyzing existing cross correlation between John Hancock Financial and Leuthold Global Fund, you can compare the effects of market volatilities on John Hancock and Leuthold Global 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 Leuthold Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Leuthold Global.

Diversification Opportunities for John Hancock and Leuthold Global

0.37

Correlation Coefficient

John Hancock  Leuthold Global

Weak diversification

The 3 months correlation between John and Leuthold is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Leuthold Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold Global 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 Financial are associated (or correlated) with Leuthold Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold Global has no effect on the direction of John Hancock i.e., John Hancock and Leuthold Global go up and down completely randomly.

Pair Corralation between John Hancock and Leuthold Global

Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Leuthold Global. In addition to that, John Hancock is 2.65 times more volatile than Leuthold Global Fund. It trades about -0.02 of its total potential returns per unit of risk. Leuthold Global Fund is currently generating about 0.16 per unit of volatility. If you would invest  877.00  in Leuthold Global Fund on December 19, 2024 and sell it today you would earn a total of  44.00  from holding Leuthold Global Fund or generate 5.02% return on investment over 90 days.

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

John Hancock Financial  vs.  Leuthold Global Fund

John Hancock Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, John Hancock is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Leuthold Global

Risk-Adjusted Performance

Good

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

Pair Trading with John Hancock and Leuthold Global

The main advantage of trading using opposite John Hancock and Leuthold Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Leuthold Global 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 Leuthold Global will offset losses from the drop in Leuthold Global's long position.

The idea behind John Hancock Financial and Leuthold Global Fund 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.