Correlation Between Jhancock Global and John Hancock
Can any of the company-specific risk be diversified away by investing in both Jhancock 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 Jhancock 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 Jhancock Global Equity and John Hancock Financial, you can compare the effects of market volatilities on Jhancock 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 Jhancock Global with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Global and John Hancock.
Diversification Opportunities for Jhancock Global and John Hancock
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and John is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Global Equity and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Jhancock 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 Jhancock Global Equity 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 Financial has no effect on the direction of Jhancock Global i.e., Jhancock Global and John Hancock go up and down completely randomly.
Pair Corralation between Jhancock Global and John Hancock
Assuming the 90 days horizon Jhancock Global Equity is expected to under-perform the John Hancock. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jhancock Global Equity is 1.94 times less risky than John Hancock. The mutual fund trades about -0.01 of its potential returns per unit of risk. The John Hancock Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,800 in John Hancock Financial on September 13, 2024 and sell it today you would earn a total of 55.00 from holding John Hancock Financial or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Global Equity vs. John Hancock Financial
Performance |
| Timeline |
| Jhancock Global Equity |
| John Hancock Financial |
Jhancock Global and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Global and John Hancock
The main advantage of trading using opposite Jhancock Global and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock 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.| Jhancock Global vs. Regional Bank Fund | Jhancock Global vs. Regional Bank Fund | Jhancock Global vs. Multimanager Lifestyle Moderate | Jhancock Global vs. Multimanager Lifestyle Balanced |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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