Correlation Between John Hancock and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both John Hancock and Goldman Sachs 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 John Hancock and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Global and Goldman Sachs Short, you can compare the effects of market volatilities on John Hancock and Goldman Sachs 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 John Hancock with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Goldman Sachs.
Diversification Opportunities for John Hancock and Goldman Sachs
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and GOLDMAN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Global and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and John Hancock 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 John Hancock Global are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Short has no effect on the direction of John Hancock i.e., John Hancock and Goldman Sachs go up and down completely randomly.
Pair Corralation between John Hancock and Goldman Sachs
Assuming the 90 days horizon John Hancock is expected to generate 1.72 times less return on investment than Goldman Sachs. In addition to that, John Hancock is 8.02 times more volatile than Goldman Sachs Short. It trades about 0.01 of its total potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.18 per unit of volatility. If you would invest 943.00 in Goldman Sachs Short on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Goldman Sachs Short or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Global vs. Goldman Sachs Short
Performance |
| Timeline |
| John Hancock Global |
| Goldman Sachs Short |
John Hancock and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Goldman Sachs
The main advantage of trading using opposite John Hancock and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| John Hancock vs. Goldman Sachs Short | John Hancock vs. First Eagle Gold | John Hancock vs. James Balanced Golden | John Hancock vs. Global Gold Fund |
| Goldman Sachs vs. SPACE | Goldman Sachs vs. Bayview Acquisition Corp | Goldman Sachs vs. Ampleforth | Goldman Sachs vs. ionet |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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