Correlation Between John Hancock and Boston Partners
Can any of the company-specific risk be diversified away by investing in both John Hancock and Boston Partners 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 Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Ii and Boston Partners Small, you can compare the effects of market volatilities on John Hancock and Boston Partners 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 Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Boston Partners.
Diversification Opportunities for John Hancock and Boston Partners
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Boston is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Boston Partners Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Small 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 Ii are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Small has no effect on the direction of John Hancock i.e., John Hancock and Boston Partners go up and down completely randomly.
Pair Corralation between John Hancock and Boston Partners
Assuming the 90 days horizon John Hancock Ii is expected to under-perform the Boston Partners. But the mutual fund apears to be less risky and, when comparing its historical volatility, John Hancock Ii is 1.01 times less risky than Boston Partners. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Boston Partners Small is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,426 in Boston Partners Small on December 27, 2024 and sell it today you would lose (95.00) from holding Boston Partners Small or give up 3.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
John Hancock Ii vs. Boston Partners Small
Performance |
Timeline |
John Hancock Ii |
Boston Partners Small |
John Hancock and Boston Partners Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Boston Partners
The main advantage of trading using opposite John Hancock and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.John Hancock vs. Franklin Emerging Market | John Hancock vs. Ultraemerging Markets Profund | John Hancock vs. Saat Moderate Strategy | John Hancock vs. Barings Emerging Markets |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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