Correlation Between L Abbett and John Hancock

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

By analyzing existing cross correlation between L Abbett Growth and John Hancock Global, you can compare the effects of market volatilities on L Abbett 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 L Abbett with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and John Hancock.

Diversification Opportunities for L Abbett and John Hancock

-0.48

Correlation Coefficient

L Abbett  John Hancock

Very good diversification

The 3 months correlation between LGLSX and John is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and L Abbett 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 L Abbett Growth 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 Global has no effect on the direction of L Abbett i.e., L Abbett and John Hancock go up and down completely randomly.

Pair Corralation between L Abbett and John Hancock

Assuming the 90 days horizon L Abbett Growth is expected to generate 1.13 times more return on investment than John Hancock. However, L Abbett is 1.13 times more volatile than John Hancock Global. It trades about 0.02 of its potential returns per unit of risk. John Hancock Global is currently generating about -0.4 per unit of risk. If you would invest  4,864  in L Abbett Growth on October 8, 2024 and sell it today you would earn a total of  11.00  from holding L Abbett Growth or generate 0.23% return on investment over 90 days.

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

L Abbett Growth  vs.  John Hancock Global

L Abbett Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, L Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with L Abbett and John Hancock

The main advantage of trading using opposite L Abbett and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett 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.

The idea behind L Abbett Growth and John Hancock Global 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.