Correlation Between John Hancock and IShares Morningstar
Can any of the company-specific risk be diversified away by investing in both John Hancock and IShares Morningstar 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 IShares Morningstar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Multifactor and iShares Morningstar Small Cap, you can compare the effects of market volatilities on John Hancock and IShares Morningstar 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 IShares Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and IShares Morningstar.
Diversification Opportunities for John Hancock and IShares Morningstar
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and iShares Morningstar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Morningstar 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 Multifactor are associated (or correlated) with IShares Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Morningstar has no effect on the direction of John Hancock i.e., John Hancock and IShares Morningstar go up and down completely randomly.
Pair Corralation between John Hancock and IShares Morningstar
Given the investment horizon of 90 days John Hancock Multifactor is expected to generate 0.85 times more return on investment than IShares Morningstar. However, John Hancock Multifactor is 1.17 times less risky than IShares Morningstar. It trades about -0.21 of its potential returns per unit of risk. iShares Morningstar Small Cap is currently generating about -0.22 per unit of risk. If you would invest 6,314 in John Hancock Multifactor on October 9, 2024 and sell it today you would lose (264.00) from holding John Hancock Multifactor or give up 4.18% 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 Multifactor vs. iShares Morningstar Small Cap
Performance |
| Timeline |
| John Hancock Multifactor |
| iShares Morningstar |
John Hancock and IShares Morningstar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and IShares Morningstar
The main advantage of trading using opposite John Hancock and IShares Morningstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, IShares Morningstar 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 IShares Morningstar will offset losses from the drop in IShares Morningstar's long position.| John Hancock vs. John Hancock Multifactor | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. JPMorgan Diversified Return |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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