Correlation Between Xtrackers MSCI and John Hancock
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI Emerging and John Hancock Multifactor, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and John Hancock.
Diversification Opportunities for Xtrackers MSCI and John Hancock
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and John is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Emerging and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Xtrackers MSCI 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 Xtrackers MSCI Emerging 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 Multifactor has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and John Hancock go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and John Hancock
Given the investment horizon of 90 days Xtrackers MSCI Emerging is expected to generate 0.96 times more return on investment than John Hancock. However, Xtrackers MSCI Emerging is 1.04 times less risky than John Hancock. It trades about 0.05 of its potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.04 per unit of risk. If you would invest 2,120 in Xtrackers MSCI Emerging on September 3, 2024 and sell it today you would earn a total of 440.25 from holding Xtrackers MSCI Emerging or generate 20.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI Emerging vs. John Hancock Multifactor
Performance |
| Timeline |
| Xtrackers MSCI Emerging |
| John Hancock Multifactor |
Xtrackers MSCI and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and John Hancock
The main advantage of trading using opposite Xtrackers MSCI and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. Xtrackers MSCI EAFE | Xtrackers MSCI vs. Xtrackers MSCI All | Xtrackers MSCI vs. Xtrackers MSCI Japan | Xtrackers MSCI vs. iShares Currency Hedged |
| John Hancock vs. John Hancock Multifactor | John Hancock vs. John Hancock Multifactor | John Hancock vs. John Hancock Multifactor | John Hancock vs. PIMCO RAFI Dynamic |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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