Correlation Between Versus Capital and John Hancock

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

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

Diversification Opportunities for Versus Capital and John Hancock

0.13

Correlation Coefficient

Versus Capital  John Hancock

Average diversification

The 3 months correlation between Versus and John is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Versus Capital Multi Manager 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 Versus Capital 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 Versus Capital Multi Manager 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 Versus Capital i.e., Versus Capital and John Hancock go up and down completely randomly.

Pair Corralation between Versus Capital and John Hancock

Assuming the 90 days horizon Versus Capital Multi Manager is expected to generate 0.19 times more return on investment than John Hancock. However, Versus Capital Multi Manager is 5.17 times less risky than John Hancock. It trades about 0.03 of its potential returns per unit of risk. John Hancock Variable is currently generating about -0.01 per unit of risk. If you would invest  2,430  in Versus Capital Multi Manager on December 29, 2024 and sell it today you would earn a total of  9.00  from holding Versus Capital Multi Manager or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Versus Capital Multi Manager  vs.  John Hancock Variable

Versus Capital Multi

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Versus Capital Multi Manager are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Versus Capital 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

Very Weak

Over the last 90 days John Hancock Variable has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Versus Capital and John Hancock

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

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.