Correlation Between Multi Index and John Hancock
Can any of the company-specific risk be diversified away by investing in both Multi Index 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 Multi Index and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Index 2015 Lifetime and John Hancock Global, you can compare the effects of market volatilities on Multi Index 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 Multi Index with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Index and John Hancock.
Diversification Opportunities for Multi Index and John Hancock
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and John is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Multi Index 2015 Lifetime and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Multi Index 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 Multi Index 2015 Lifetime 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 Global has no effect on the direction of Multi Index i.e., Multi Index and John Hancock go up and down completely randomly.
Pair Corralation between Multi Index and John Hancock
Assuming the 90 days horizon Multi Index is expected to generate 1.56 times less return on investment than John Hancock. But when comparing it to its historical volatility, Multi Index 2015 Lifetime is 1.56 times less risky than John Hancock. It trades about 0.09 of its potential returns per unit of risk. John Hancock Global is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,039 in John Hancock Global on September 12, 2024 and sell it today you would earn a total of 214.00 from holding John Hancock Global or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Multi Index 2015 Lifetime vs. John Hancock Global
Performance |
| Timeline |
| Multi Index 2015 |
| John Hancock Global |
Multi Index and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Index and John Hancock
The main advantage of trading using opposite Multi Index and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Index 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.| Multi Index vs. Fidelity Advisor Diversified | Multi Index vs. Davenport Small Cap | Multi Index vs. Delaware Limited Term Diversified | Multi Index vs. Adams Diversified Equity |
| John Hancock vs. Dodge Global Stock | John Hancock vs. Franklin Mutual Global | John Hancock vs. T Rowe Price | John Hancock vs. HUMANA INC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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