Correlation Between John Hancock and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both John Hancock and Dreyfus Global 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 Global 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 Global Dynamic, you can compare the effects of market volatilities on John Hancock and Dreyfus Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Dreyfus Global.
Diversification Opportunities for John Hancock and Dreyfus Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Dreyfus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Dreyfus Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Dynamic 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Dynamic has no effect on the direction of John Hancock i.e., John Hancock and Dreyfus Global go up and down completely randomly.
Pair Corralation between John Hancock and Dreyfus Global
Assuming the 90 days horizon John Hancock is expected to generate 1.2 times less return on investment than Dreyfus Global. In addition to that, John Hancock is 2.84 times more volatile than Dreyfus Global Dynamic. It trades about 0.09 of its total potential returns per unit of risk. Dreyfus Global Dynamic is currently generating about 0.31 per unit of volatility. If you would invest 1,093 in Dreyfus Global Dynamic on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Dreyfus Global Dynamic or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
John Hancock Government vs. Dreyfus Global Dynamic
Performance |
| Timeline |
| John Hancock Government |
| Dreyfus Global Dynamic |
John Hancock and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Dreyfus Global
The main advantage of trading using opposite John Hancock and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Dreyfus Global 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 Global will offset losses from the drop in Dreyfus Global'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 Global vs. Federated Pennsylvania Municipal | Dreyfus Global vs. T Rowe Price | Dreyfus Global vs. Bbh Intermediate Municipal | Dreyfus Global vs. Bbh Intermediate Municipal |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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