Correlation Between John Hancock and Ariel Focus

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

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

Diversification Opportunities for John Hancock and Ariel Focus

0.0

Correlation Coefficient

John Hancock  Ariel Focus

Pay attention - limited upside

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

Pair Corralation between John Hancock and Ariel Focus

If you would invest  0.00  in Ariel Focus Fund on March 7, 2024 and sell it today you would earn a total of  0.00  from holding Ariel Focus Fund or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

John Hancock Disciplined  vs.  Ariel Focus Fund

John Hancock Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ariel Focus Fund

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Ariel Focus Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ariel Focus 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 Ariel Focus

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

The idea behind John Hancock Disciplined and Ariel Focus 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.