Correlation Between John Hancock and Dunham Dynamic

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

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

Diversification Opportunities for John Hancock and Dunham Dynamic

0.11

Correlation Coefficient

John Hancock  Dunham Dynamic

Average diversification

The 3 months correlation between John and Dunham is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro 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 Funds are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of John Hancock i.e., John Hancock and Dunham Dynamic go up and down completely randomly.

Pair Corralation between John Hancock and Dunham Dynamic

Assuming the 90 days horizon John Hancock Funds is expected to under-perform the Dunham Dynamic. In addition to that, John Hancock is 1.73 times more volatile than Dunham Dynamic Macro. It trades about -0.13 of its total potential returns per unit of risk. Dunham Dynamic Macro is currently generating about -0.12 per unit of volatility. If you would invest  1,204  in Dunham Dynamic Macro on December 28, 2024 and sell it today you would lose (8.00) from holding Dunham Dynamic Macro or give up 0.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

John Hancock Funds  vs.  Dunham Dynamic Macro

John Hancock Funds

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Funds are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Dynamic Macro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dunham Dynamic Macro has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dunham Dynamic 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 Dunham Dynamic

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

The idea behind John Hancock Funds and Dunham Dynamic Macro 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.