Correlation Between Global Equity and John Hancock
Can any of the company-specific risk be diversified away by investing in both Global Equity 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 Global Equity and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Equity Fund and John Hancock Global, you can compare the effects of market volatilities on Global Equity 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 Global Equity with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Equity and John Hancock.
Diversification Opportunities for Global Equity and John Hancock
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and John is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Global Equity Fund and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Global Equity 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 Global Equity Fund 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 Global has no effect on the direction of Global Equity i.e., Global Equity and John Hancock go up and down completely randomly.
Pair Corralation between Global Equity and John Hancock
Assuming the 90 days horizon Global Equity Fund is expected to generate 0.88 times more return on investment than John Hancock. However, Global Equity Fund is 1.14 times less risky than John Hancock. It trades about 0.42 of its potential returns per unit of risk. John Hancock Global is currently generating about 0.35 per unit of risk. If you would invest 1,166 in Global Equity Fund on November 2, 2024 and sell it today you would earn a total of 58.00 from holding Global Equity Fund or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Equity Fund vs. John Hancock Global
Performance |
| Timeline |
| Global Equity |
| John Hancock Global |
Global Equity and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Equity and John Hancock
The main advantage of trading using opposite Global Equity and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Equity 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.| Global Equity vs. Gabelli Global Financial | Global Equity vs. Financial Industries Fund | Global Equity vs. Financials Ultrasector Profund | Global Equity vs. First Trust Specialty |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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