Correlation Between Franklin Dynatech and John Hancock

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

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

Diversification Opportunities for Franklin Dynatech and John Hancock

-0.72

Correlation Coefficient

Franklin Dynatech  John Hancock

Pay attention - limited upside

The 3 months correlation between Franklin and John is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond and Franklin Dynatech 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 Franklin Dynatech 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 Bond has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and John Hancock go up and down completely randomly.

Pair Corralation between Franklin Dynatech and John Hancock

Assuming the 90 days horizon Franklin Dynatech Fund is expected to generate 3.77 times more return on investment than John Hancock. However, Franklin Dynatech is 3.77 times more volatile than John Hancock Bond. It trades about 0.18 of its potential returns per unit of risk. John Hancock Bond is currently generating about -0.03 per unit of risk. If you would invest  16,608  in Franklin Dynatech Fund on September 3, 2024 and sell it today you would earn a total of  2,293  from holding Franklin Dynatech Fund or generate 13.81% return on investment over 90 days.

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

Franklin Dynatech Fund  vs.  John Hancock Bond

Franklin Dynatech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Dynatech Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Dynatech showed solid returns over the last few months and may actually be approaching a breakup point.

John Hancock Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, 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 Franklin Dynatech and John Hancock

The main advantage of trading using opposite Franklin Dynatech and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech 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 Franklin Dynatech Fund and John Hancock Bond 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.