Correlation Between John Hancock and Government Securities
Can any of the company-specific risk be diversified away by investing in both John Hancock and Government Securities 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 Government Securities 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 Government Securities Fund, you can compare the effects of market volatilities on John Hancock and Government Securities 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 Government Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Government Securities.
Diversification Opportunities for John Hancock and Government Securities
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Government is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Government Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Securities 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 Government Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Securities has no effect on the direction of John Hancock i.e., John Hancock and Government Securities go up and down completely randomly.
Pair Corralation between John Hancock and Government Securities
Assuming the 90 days horizon John Hancock Government is expected to under-perform the Government Securities. In addition to that, John Hancock is 1.36 times more volatile than Government Securities Fund. It trades about -0.05 of its total potential returns per unit of risk. Government Securities Fund is currently generating about -0.02 per unit of volatility. If you would invest 878.00 in Government Securities Fund on August 27, 2024 and sell it today you would lose (1.00) from holding Government Securities Fund or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Government Securities Fund
Performance |
| Timeline |
| John Hancock Government |
| Government Securities |
John Hancock and Government Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Government Securities
The main advantage of trading using opposite John Hancock and Government Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Government Securities 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 Government Securities will offset losses from the drop in Government Securities' 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 |
| Government Securities vs. Capital Growth Fund | Government Securities vs. Emerging Markets Fund | Government Securities vs. High Income Fund | Government Securities vs. International Fund International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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