Correlation Between IShares MSCI and John Hancock
Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares 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 iShares MSCI Canada and John Hancock Hedged, you can compare the effects of market volatilities on IShares 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 IShares MSCI with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and John Hancock.
Diversification Opportunities for IShares MSCI and John Hancock
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and John is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Canada and John Hancock Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Hedged and IShares 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 iShares MSCI Canada 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 Hedged has no effect on the direction of IShares MSCI i.e., IShares MSCI and John Hancock go up and down completely randomly.
Pair Corralation between IShares MSCI and John Hancock
Considering the 90-day investment horizon iShares MSCI Canada is expected to generate 1.25 times more return on investment than John Hancock. However, IShares MSCI is 1.25 times more volatile than John Hancock Hedged. It trades about 0.08 of its potential returns per unit of risk. John Hancock Hedged is currently generating about 0.02 per unit of risk. If you would invest 3,927 in iShares MSCI Canada on November 2, 2024 and sell it today you would earn a total of 251.00 from holding iShares MSCI Canada or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Canada vs. John Hancock Hedged
Performance |
| Timeline |
| iShares MSCI Canada |
| John Hancock Hedged |
IShares MSCI and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and John Hancock
The main advantage of trading using opposite IShares MSCI and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.| IShares MSCI vs. iShares MSCI Australia | IShares MSCI vs. iShares MSCI Germany | IShares MSCI vs. iShares MSCI United | IShares MSCI vs. iShares MSCI Switzerland |
| John Hancock vs. Ellsworth Convertible Growth | John Hancock vs. Delaware Investments Florida | John Hancock vs. RENN Fund | John Hancock vs. Nuveen New Jersey |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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