Correlation Between Clough Global and John Hancock
Can any of the company-specific risk be diversified away by investing in both Clough Global 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 Clough Global and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clough Global Allocation and John Hancock Hedged, you can compare the effects of market volatilities on Clough Global 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 Clough Global with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clough Global and John Hancock.
Diversification Opportunities for Clough Global and John Hancock
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clough and John is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Clough Global Allocation 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 Clough Global 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 Clough Global Allocation 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 Clough Global i.e., Clough Global and John Hancock go up and down completely randomly.
Pair Corralation between Clough Global and John Hancock
Considering the 90-day investment horizon Clough Global is expected to generate 2.07 times less return on investment than John Hancock. In addition to that, Clough Global is 1.8 times more volatile than John Hancock Hedged. It trades about 0.01 of its total potential returns per unit of risk. John Hancock Hedged is currently generating about 0.05 per unit of volatility. If you would invest 1,093 in John Hancock Hedged on August 29, 2024 and sell it today you would earn a total of 7.00 from holding John Hancock Hedged or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clough Global Allocation vs. John Hancock Hedged
Performance |
| Timeline |
| Clough Global Allocation |
| John Hancock Hedged |
Clough Global and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clough Global and John Hancock
The main advantage of trading using opposite Clough Global and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clough Global 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.| Clough Global vs. Ares Dynamic Credit | Clough Global vs. Principal Real Estate | Clough Global vs. Tortoise Power And | Clough Global vs. Aquagold International |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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