Correlation Between John Hancock and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both John Hancock and Multimanager Lifestyle 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 Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Disciplined and Multimanager Lifestyle Balanced, you can compare the effects of market volatilities on John Hancock and Multimanager Lifestyle 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 Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Multimanager Lifestyle.
Diversification Opportunities for John Hancock and Multimanager Lifestyle
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Multimanager is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Multimanager Lifestyle Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle 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 Disciplined are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of John Hancock i.e., John Hancock and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between John Hancock and Multimanager Lifestyle
Assuming the 90 days horizon John Hancock Disciplined is expected to generate 2.44 times more return on investment than Multimanager Lifestyle. However, John Hancock is 2.44 times more volatile than Multimanager Lifestyle Balanced. It trades about 0.21 of its potential returns per unit of risk. Multimanager Lifestyle Balanced is currently generating about 0.16 per unit of risk. If you would invest 2,482 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 127.00 from holding John Hancock Disciplined or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Disciplined vs. Multimanager Lifestyle Balance
Performance |
| Timeline |
| John Hancock Disciplined |
| Multimanager Lifestyle |
John Hancock and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Multimanager Lifestyle
The main advantage of trading using opposite John Hancock and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| John Hancock vs. Scharf Global Opportunity | John Hancock vs. Blue Current Global | John Hancock vs. Commonwealth Global Fund | John Hancock vs. Us Global Leaders |
| Multimanager Lifestyle vs. Gamco Global Gold | Multimanager Lifestyle vs. Gabelli Gold Fund | Multimanager Lifestyle vs. Goldman Sachs Centrated | Multimanager Lifestyle vs. Short Precious Metals |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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