Correlation Between Xtrackers Russell and John Hancock
Can any of the company-specific risk be diversified away by investing in both Xtrackers Russell 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 Russell 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 Russell Multifactor and John Hancock Multifactor, you can compare the effects of market volatilities on Xtrackers Russell 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 Russell with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Russell and John Hancock.
Diversification Opportunities for Xtrackers Russell and John Hancock
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and John is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Russell Multifactor 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 Russell 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 Russell Multifactor 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 Russell i.e., Xtrackers Russell and John Hancock go up and down completely randomly.
Pair Corralation between Xtrackers Russell and John Hancock
Given the investment horizon of 90 days Xtrackers Russell is expected to generate 1.19 times less return on investment than John Hancock. In addition to that, Xtrackers Russell is 1.01 times more volatile than John Hancock Multifactor. It trades about 0.08 of its total potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.1 per unit of volatility. If you would invest 5,027 in John Hancock Multifactor on September 3, 2024 and sell it today you would earn a total of 2,298 from holding John Hancock Multifactor or generate 45.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Russell Multifactor vs. John Hancock Multifactor
Performance |
| Timeline |
| Xtrackers Russell |
| John Hancock Multifactor |
Xtrackers Russell and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Russell and John Hancock
The main advantage of trading using opposite Xtrackers Russell and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Russell 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 Russell vs. Xtrackers FTSE Developed | Xtrackers Russell vs. John Hancock Multifactor | Xtrackers Russell vs. Xtrackers MSCI All | Xtrackers Russell vs. Xtrackers MSCI Eurozone |
| John Hancock vs. John Hancock Multifactor | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. iShares Equity Factor | John Hancock vs. John Hancock Multifactor |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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