Correlation Between John Hancock and Columbia Small

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

By analyzing existing cross correlation between John Hancock Money and Columbia Small Cap, you can compare the effects of market volatilities on John Hancock and Columbia Small 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 Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Columbia Small.

Diversification Opportunities for John Hancock and Columbia Small

0.0

Correlation Coefficient

John Hancock  Columbia Small

Pay attention - limited upside

The 3 months correlation between John and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Money and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap 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 Money are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of John Hancock i.e., John Hancock and Columbia Small go up and down completely randomly.

Pair Corralation between John Hancock and Columbia Small

If you would invest  2,665  in Columbia Small Cap on September 5, 2024 and sell it today you would earn a total of  510.00  from holding Columbia Small Cap or generate 19.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

John Hancock Money  vs.  Columbia Small Cap

John Hancock Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Money 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.

Columbia Small Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Small Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with John Hancock and Columbia Small

The main advantage of trading using opposite John Hancock and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Columbia Small 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 Columbia Small will offset losses from the drop in Columbia Small's long position.

The idea behind John Hancock Money and Columbia Small Cap 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 Valuation module to check real value of public entities based on technical and fundamental data.