Correlation Between John Hancock and Dreyfus Diversified
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dreyfus Diversified 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 Dreyfus Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Government and Dreyfus Diversified International, you can compare the effects of market volatilities on John Hancock and Dreyfus Diversified 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 Dreyfus Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dreyfus Diversified.
Diversification Opportunities for John Hancock and Dreyfus Diversified
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between John and Dreyfus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Dreyfus Diversified Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Diversified 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 Government are associated (or correlated) with Dreyfus Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Diversified has no effect on the direction of John Hancock i.e., John Hancock and Dreyfus Diversified go up and down completely randomly.
Pair Corralation between John Hancock and Dreyfus Diversified
Assuming the 90 days horizon John Hancock is expected to generate 1.57 times less return on investment than Dreyfus Diversified. But when comparing it to its historical volatility, John Hancock Government is 1.62 times less risky than Dreyfus Diversified. It trades about 0.07 of its potential returns per unit of risk. Dreyfus Diversified International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 996.00 in Dreyfus Diversified International on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Dreyfus Diversified International or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.2% |
| Values | Daily Returns |
John Hancock Government vs. Dreyfus Diversified Internatio
Performance |
| Timeline |
| John Hancock Government |
| Dreyfus Diversified |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
John Hancock and Dreyfus Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Dreyfus Diversified
The main advantage of trading using opposite John Hancock and Dreyfus Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dreyfus Diversified 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 Dreyfus Diversified will offset losses from the drop in Dreyfus Diversified's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
| Dreyfus Diversified vs. Dws Government Money | Dreyfus Diversified vs. Lord Abbett Government | Dreyfus Diversified vs. Us Government Securities | Dreyfus Diversified vs. John Hancock Government |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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