Correlation Between Columbia Diversified and John Hancock

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

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

Diversification Opportunities for Columbia Diversified and John Hancock

0.88

Correlation Coefficient

Columbia Diversified  John Hancock

Very poor diversification

The 3 months correlation between Columbia and John is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Diversified Equity and John Hancock Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Strategic and Columbia Diversified 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 Columbia Diversified Equity 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 Strategic has no effect on the direction of Columbia Diversified i.e., Columbia Diversified and John Hancock go up and down completely randomly.

Pair Corralation between Columbia Diversified and John Hancock

Assuming the 90 days horizon Columbia Diversified Equity is expected to generate 0.74 times more return on investment than John Hancock. However, Columbia Diversified Equity is 1.35 times less risky than John Hancock. It trades about 0.13 of its potential returns per unit of risk. John Hancock Strategic is currently generating about 0.08 per unit of risk. If you would invest  1,763  in Columbia Diversified Equity on July 21, 2025 and sell it today you would earn a total of  92.00  from holding Columbia Diversified Equity or generate 5.22% return on investment over 90 days.

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

Columbia Diversified Equity  vs.  John Hancock Strategic

Columbia Diversified

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Diversified Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Strategic

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Strategic are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Columbia Diversified and John Hancock

The main advantage of trading using opposite Columbia Diversified and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Diversified 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 Columbia Diversified Equity and John Hancock Strategic 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.