Correlation Between Aggressive Growth and John Hancock

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

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

Diversification Opportunities for Aggressive Growth and John Hancock

0.72

Correlation Coefficient

Aggressive Growth  John Hancock

Poor diversification

The 3 months correlation between Aggressive and John is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Portfolio 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 Aggressive Growth 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 Aggressive Growth Portfolio 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 Aggressive Growth i.e., Aggressive Growth and John Hancock go up and down completely randomly.

Pair Corralation between Aggressive Growth and John Hancock

Assuming the 90 days horizon Aggressive Growth Portfolio is expected to under-perform the John Hancock. In addition to that, Aggressive Growth is 1.07 times more volatile than John Hancock Variable. It trades about -0.21 of its total potential returns per unit of risk. John Hancock Variable is currently generating about 0.07 per unit of volatility. If you would invest  2,007  in John Hancock Variable on September 22, 2024 and sell it today you would earn a total of  39.00  from holding John Hancock Variable or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Aggressive Growth Portfolio  vs.  John Hancock Variable

Aggressive Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Growth Portfolio are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aggressive Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Variable

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Variable are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aggressive Growth and John Hancock

The main advantage of trading using opposite Aggressive Growth and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth 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 Aggressive Growth Portfolio and John Hancock Variable 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.