Correlation Between John Hancock and Vanguard Short-term

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

By analyzing existing cross correlation between John Hancock Money and Vanguard Short Term Inflation Protected, you can compare the effects of market volatilities on John Hancock and Vanguard Short-term 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 Vanguard Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Vanguard Short-term.

Diversification Opportunities for John Hancock and Vanguard Short-term

0.0

Correlation Coefficient

John Hancock  Vanguard Short-term

Pay attention - limited upside

The 3 months correlation between John and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Money and Vanguard Short Term Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short Term 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 Money are associated (or correlated) with Vanguard Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of John Hancock i.e., John Hancock and Vanguard Short-term go up and down completely randomly.

Pair Corralation between John Hancock and Vanguard Short-term

If you would invest  2,429  in Vanguard Short Term Inflation Protected on December 29, 2024 and sell it today you would earn a total of  71.00  from holding Vanguard Short Term Inflation Protected or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

John Hancock Money  vs.  Vanguard Short Term Inflation

John Hancock Money

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Money 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.

Vanguard Short Term

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Short Term Inflation Protected are ranked lower than 34 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Short-term 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 Vanguard Short-term

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

The idea behind John Hancock Money and Vanguard Short Term Inflation Protected 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.