Correlation Between Chartwell Short and John Hancock

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

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

Diversification Opportunities for Chartwell Short and John Hancock

0.34

Correlation Coefficient

Chartwell Short  John Hancock

Weak diversification

The 3 months correlation between Chartwell and John is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and Chartwell Short 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 Chartwell Short Duration 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 Variable has no effect on the direction of Chartwell Short i.e., Chartwell Short and John Hancock go up and down completely randomly.

Pair Corralation between Chartwell Short and John Hancock

Assuming the 90 days horizon Chartwell Short is expected to generate 6.08 times less return on investment than John Hancock. But when comparing it to its historical volatility, Chartwell Short Duration is 9.52 times less risky than John Hancock. It trades about 0.16 of its potential returns per unit of risk. John Hancock Variable is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,078  in John Hancock Variable on October 11, 2024 and sell it today you would earn a total of  986.00  from holding John Hancock Variable or generate 91.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Chartwell Short Duration  vs.  John Hancock Variable

Chartwell Short Duration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Variable

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Variable are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chartwell Short and John Hancock

The main advantage of trading using opposite Chartwell Short and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Short 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 Chartwell Short Duration and John Hancock Variable 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.