Correlation Between Capital Appreciation and John Hancock
Can any of the company-specific risk be diversified away by investing in both Capital Appreciation 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 Capital Appreciation and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Appreciation Fund and John Hancock Variable, you can compare the effects of market volatilities on Capital Appreciation 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 Capital Appreciation with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Appreciation and John Hancock.
Diversification Opportunities for Capital Appreciation and John Hancock
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and John is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capital Appreciation Fund and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and Capital Appreciation 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 Capital Appreciation Fund 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 Variable has no effect on the direction of Capital Appreciation i.e., Capital Appreciation and John Hancock go up and down completely randomly.
Pair Corralation between Capital Appreciation and John Hancock
Assuming the 90 days horizon Capital Appreciation Fund is expected to under-perform the John Hancock. In addition to that, Capital Appreciation is 1.42 times more volatile than John Hancock Variable. It trades about -0.19 of its total potential returns per unit of risk. John Hancock Variable is currently generating about -0.13 per unit of volatility. If you would invest 6,200 in John Hancock Variable on December 4, 2024 and sell it today you would lose (145.00) from holding John Hancock Variable or give up 2.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Capital Appreciation Fund vs. John Hancock Variable
Performance |
Timeline |
Capital Appreciation |
John Hancock Variable |
Capital Appreciation and John Hancock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capital Appreciation and John Hancock
The main advantage of trading using opposite Capital Appreciation and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Appreciation 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.Capital Appreciation vs. Neuberger Berman Income | Capital Appreciation vs. Prudential High Yield | Capital Appreciation vs. High Yield Fund Investor | Capital Appreciation vs. Gmo High Yield |
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Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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