Correlation Between John Hancock and Intech Us

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

By analyzing existing cross correlation between John Hancock Financial and Intech Managed Volatility, you can compare the effects of market volatilities on John Hancock and Intech Us 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 Intech Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Intech Us.

Diversification Opportunities for John Hancock and Intech Us

0.88

Correlation Coefficient

John Hancock  Intech Us

Very poor diversification

The 3 months correlation between John and Intech is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility 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 Financial are associated (or correlated) with Intech Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of John Hancock i.e., John Hancock and Intech Us go up and down completely randomly.

Pair Corralation between John Hancock and Intech Us

Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.29 times more return on investment than Intech Us. However, John Hancock is 1.29 times more volatile than Intech Managed Volatility. It trades about 0.62 of its potential returns per unit of risk. Intech Managed Volatility is currently generating about 0.69 per unit of risk. If you would invest  3,017  in John Hancock Financial on February 19, 2025 and sell it today you would earn a total of  467.00  from holding John Hancock Financial or generate 15.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

John Hancock Financial  vs.  Intech Managed Volatility

John Hancock Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, John Hancock is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Intech Managed Volatility

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intech Managed Volatility has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Intech Us 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 Intech Us

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

The idea behind John Hancock Financial and Intech Managed Volatility 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.