Correlation Between John Hancock and Inflation Protected

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

By analyzing existing cross correlation between John Hancock Investment and Inflation Protected Bond Fund, you can compare the effects of market volatilities on John Hancock and Inflation Protected 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 Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Inflation Protected.

Diversification Opportunities for John Hancock and Inflation Protected

0.5

Correlation Coefficient

John Hancock  Inflation Protected

Very weak diversification

The 3 months correlation between John and Inflation is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Investment are associated (or correlated) with Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of John Hancock i.e., John Hancock and Inflation Protected go up and down completely randomly.

Pair Corralation between John Hancock and Inflation Protected

Assuming the 90 days horizon John Hancock Investment is expected to generate 1.79 times more return on investment than Inflation Protected. However, John Hancock is 1.79 times more volatile than Inflation Protected Bond Fund. It trades about 0.19 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.11 per unit of risk. If you would invest  7,649  in John Hancock Investment on September 12, 2024 and sell it today you would earn a total of  658.00  from holding John Hancock Investment or generate 8.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

John Hancock Investment  vs.  Inflation Protected Bond Fund

John Hancock Investment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Investment are ranked lower than 15 (%) 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.

Inflation Protected

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflation Protected Bond Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Inflation Protected is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Inflation Protected

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

The idea behind John Hancock Investment and Inflation Protected Bond Fund 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.