Correlation Between John Hancock and Wealthbuilder Moderate

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

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

Diversification Opportunities for John Hancock and Wealthbuilder Moderate

0.77

Correlation Coefficient

John Hancock  Wealthbuilder Moderate

Poor diversification

The 3 months correlation between John and Wealthbuilder is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Strategic and Wealthbuilder Moderate Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wealthbuilder Moderate 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 Strategic are associated (or correlated) with Wealthbuilder Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wealthbuilder Moderate has no effect on the direction of John Hancock i.e., John Hancock and Wealthbuilder Moderate go up and down completely randomly.

Pair Corralation between John Hancock and Wealthbuilder Moderate

Assuming the 90 days horizon John Hancock Strategic is expected to generate 2.66 times more return on investment than Wealthbuilder Moderate. However, John Hancock is 2.66 times more volatile than Wealthbuilder Moderate Balanced. It trades about 0.26 of its potential returns per unit of risk. Wealthbuilder Moderate Balanced is currently generating about 0.19 per unit of risk. If you would invest  2,289  in John Hancock Strategic on May 7, 2025 and sell it today you would earn a total of  355.00  from holding John Hancock Strategic or generate 15.51% return on investment over 90 days.

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

John Hancock Strategic  vs.  Wealthbuilder Moderate Balance

John Hancock Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Strategic are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, John Hancock showed solid returns over the last few months and may actually be approaching a breakup point.

Wealthbuilder Moderate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthbuilder Moderate Balanced are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wealthbuilder Moderate 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 Wealthbuilder Moderate

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

The idea behind John Hancock Strategic and Wealthbuilder Moderate Balanced 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.