Correlation Between John Hancock and Advantage Portfolio

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

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

Diversification Opportunities for John Hancock and Advantage Portfolio

0.49

Correlation Coefficient

John Hancock  Advantage Portfolio

Very weak diversification

The 3 months correlation between JOHN and Advantage is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Emerging and Advantage Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Portfolio Class 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 Emerging are associated (or correlated) with Advantage Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Portfolio Class has no effect on the direction of John Hancock i.e., John Hancock and Advantage Portfolio go up and down completely randomly.

Pair Corralation between John Hancock and Advantage Portfolio

Assuming the 90 days horizon John Hancock Emerging is expected to generate 0.63 times more return on investment than Advantage Portfolio. However, John Hancock Emerging is 1.59 times less risky than Advantage Portfolio. It trades about 0.0 of its potential returns per unit of risk. Advantage Portfolio Class is currently generating about -0.05 per unit of risk. If you would invest  963.00  in John Hancock Emerging on December 21, 2024 and sell it today you would lose (3.00) from holding John Hancock Emerging or give up 0.31% of portfolio value over 90 days.

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

John Hancock Emerging  vs.  Advantage Portfolio Class

John Hancock Emerging

Risk-Adjusted Performance

Very Weak

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

Advantage Portfolio Class

Risk-Adjusted Performance

Very Weak

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

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

The idea behind John Hancock Emerging and Advantage Portfolio Class 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.