Correlation Between Global Absolute and John Hancock
Can any of the company-specific risk be diversified away by investing in both Global Absolute 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 Absolute 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 Absolute Return and John Hancock Government, you can compare the effects of market volatilities on Global Absolute 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 Absolute with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Absolute and John Hancock.
Diversification Opportunities for Global Absolute and John Hancock
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Global Absolute Return and John Hancock Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Government and Global Absolute 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 Absolute Return 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 Government has no effect on the direction of Global Absolute i.e., Global Absolute and John Hancock go up and down completely randomly.
Pair Corralation between Global Absolute and John Hancock
Assuming the 90 days horizon Global Absolute Return is expected to generate 1.32 times more return on investment than John Hancock. However, Global Absolute is 1.32 times more volatile than John Hancock Government. It trades about 0.17 of its potential returns per unit of risk. John Hancock Government is currently generating about 0.15 per unit of risk. If you would invest 987.00 in Global Absolute Return on November 27, 2024 and sell it today you would earn a total of 12.00 from holding Global Absolute Return or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Absolute Return vs. John Hancock Government
Performance |
| Timeline |
| Global Absolute Return |
| John Hancock Government |
Global Absolute and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Absolute and John Hancock
The main advantage of trading using opposite Global Absolute and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Absolute 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 Absolute vs. The Hartford Growth | Global Absolute vs. Vanguard Growth Index | Global Absolute vs. Qs Growth Fund | Global Absolute vs. Morgan Stanley Institutional |
| John Hancock vs. Collegeadvantage 529 Savings | John Hancock vs. Voya Government Money | John Hancock vs. Prudential Emerging Markets | John Hancock vs. Franklin Government Money |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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