Correlation Between Dodge Global and John Hancock

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

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

Diversification Opportunities for Dodge Global and John Hancock

0.76

Correlation Coefficient

Dodge Global  John Hancock

Poor diversification

The 3 months correlation between Dodge and John is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Dodge Global 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 Dodge Global Stock 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 Global has no effect on the direction of Dodge Global i.e., Dodge Global and John Hancock go up and down completely randomly.

Pair Corralation between Dodge Global and John Hancock

Assuming the 90 days horizon Dodge Global is expected to generate 1.49 times less return on investment than John Hancock. In addition to that, Dodge Global is 1.14 times more volatile than John Hancock Global. It trades about 0.07 of its total potential returns per unit of risk. John Hancock Global is currently generating about 0.12 per unit of volatility. If you would invest  1,045  in John Hancock Global on September 12, 2024 and sell it today you would earn a total of  195.00  from holding John Hancock Global or generate 18.66% return on investment over 90 days.

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

Dodge Global Stock  vs.  John Hancock Global

Dodge Global Stock

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Global Stock are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dodge Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Global 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 Dodge Global and John Hancock

The main advantage of trading using opposite Dodge Global and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Global 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 Dodge Global Stock and John Hancock Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.