Correlation Between Jhancock Multi and John Hancock
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi 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 Jhancock Multi and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Multi Index 2065 and John Hancock Esg, you can compare the effects of market volatilities on Jhancock Multi 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 Jhancock Multi with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi and John Hancock.
Diversification Opportunities for Jhancock Multi and John Hancock
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jhancock and John is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg and Jhancock Multi 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 Jhancock Multi Index 2065 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 Esg has no effect on the direction of Jhancock Multi i.e., Jhancock Multi and John Hancock go up and down completely randomly.
Pair Corralation between Jhancock Multi and John Hancock
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 0.9 times more return on investment than John Hancock. However, Jhancock Multi Index 2065 is 1.11 times less risky than John Hancock. It trades about 0.08 of its potential returns per unit of risk. John Hancock Esg is currently generating about 0.07 per unit of risk. If you would invest 1,462 in Jhancock Multi Index 2065 on August 26, 2024 and sell it today you would earn a total of 32.00 from holding Jhancock Multi Index 2065 or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. John Hancock Esg
Performance |
| Timeline |
| Jhancock Multi Index |
| John Hancock Esg |
Jhancock Multi and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi and John Hancock
The main advantage of trading using opposite Jhancock Multi and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi 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.| Jhancock Multi vs. Regional Bank Fund | Jhancock Multi vs. Regional Bank Fund | Jhancock Multi vs. Multimanager Lifestyle Moderate | Jhancock Multi vs. Multimanager Lifestyle Balanced |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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