Correlation Between Multi-index 2020 and John Hancock
Can any of the company-specific risk be diversified away by investing in both Multi-index 2020 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 2020 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 2020 Lifetime and John Hancock Ii, you can compare the effects of market volatilities on Multi-index 2020 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 2020 with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-index 2020 and John Hancock.
Diversification Opportunities for Multi-index 2020 and John Hancock
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Multi-index and John is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Multi Index 2020 Lifetime and John Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Ii and Multi-index 2020 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 2020 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 Ii has no effect on the direction of Multi-index 2020 i.e., Multi-index 2020 and John Hancock go up and down completely randomly.
Pair Corralation between Multi-index 2020 and John Hancock
Assuming the 90 days horizon Multi Index 2020 Lifetime is expected to generate 0.38 times more return on investment than John Hancock. However, Multi Index 2020 Lifetime is 2.66 times less risky than John Hancock. It trades about -0.01 of its potential returns per unit of risk. John Hancock Ii is currently generating about -0.2 per unit of risk. If you would invest 1,093 in Multi Index 2020 Lifetime on January 1, 2025 and sell it today you would lose (3.00) from holding Multi Index 2020 Lifetime or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Index 2020 Lifetime vs. John Hancock Ii
Performance |
| Timeline |
| Multi Index 2020 |
| John Hancock Ii |
Multi-index 2020 and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-index 2020 and John Hancock
The main advantage of trading using opposite Multi-index 2020 and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-index 2020 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 2020 vs. Old Westbury Fixed | ||
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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