Correlation Between John Hancock and Hartford Growth

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

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

Diversification Opportunities for John Hancock and Hartford Growth

0.06

Correlation Coefficient

John Hancock  Hartford Growth

Significant diversification

The 3 months correlation between JOHN and Hartford is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Hartford Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth Oppo 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 Government are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth Oppo has no effect on the direction of John Hancock i.e., John Hancock and Hartford Growth go up and down completely randomly.

Pair Corralation between John Hancock and Hartford Growth

Assuming the 90 days horizon John Hancock is expected to generate 14.38 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, John Hancock Government is 4.14 times less risky than Hartford Growth. It trades about 0.03 of its potential returns per unit of risk. Hartford Growth Opportunities is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,105  in Hartford Growth Opportunities on November 19, 2024 and sell it today you would earn a total of  543.00  from holding Hartford Growth Opportunities or generate 7.64% return on investment over 90 days.

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

John Hancock Government  vs.  Hartford Growth Opportunities

John Hancock Government

Risk-Adjusted Performance

Weak

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

Hartford Growth Oppo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Growth Opportunities are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with John Hancock and Hartford Growth

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

The idea behind John Hancock Government and Hartford Growth Opportunities 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.