Correlation Between Global Gold and John Hancock
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and John Hancock Global, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and John Hancock.
Diversification Opportunities for Global Gold and John Hancock
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and John is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Global Gold 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 Global Gold Fund 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 Global has no effect on the direction of Global Gold i.e., Global Gold and John Hancock go up and down completely randomly.
Pair Corralation between Global Gold and John Hancock
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.12 times more return on investment than John Hancock. However, Global Gold is 2.12 times more volatile than John Hancock Global. It trades about 0.05 of its potential returns per unit of risk. John Hancock Global is currently generating about 0.04 per unit of risk. If you would invest 1,231 in Global Gold Fund on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Global Gold Fund or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. John Hancock Global
Performance |
| Timeline |
| Global Gold Fund |
| John Hancock Global |
Global Gold and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and John Hancock
The main advantage of trading using opposite Global Gold and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. Baird Smallmid Cap | Global Gold vs. The Hartford Small | Global Gold vs. Touchstone Small Cap | Global Gold vs. Small Cap Value |
| John Hancock vs. Goldman Sachs Short | John Hancock vs. First Eagle Gold | John Hancock vs. James Balanced Golden | John Hancock vs. Global Gold Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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