Correlation Between Pace Strategic and John Hancock
Can any of the company-specific risk be diversified away by investing in both Pace Strategic 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 Pace Strategic and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Strategic Fixed and John Hancock Government, you can compare the effects of market volatilities on Pace Strategic 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 Pace Strategic with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Strategic and John Hancock.
Diversification Opportunities for Pace Strategic and John Hancock
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pace and John is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pace Strategic Fixed 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 Pace Strategic 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 Pace Strategic Fixed 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 Pace Strategic i.e., Pace Strategic and John Hancock go up and down completely randomly.
Pair Corralation between Pace Strategic and John Hancock
Assuming the 90 days horizon Pace Strategic Fixed is expected to generate 0.9 times more return on investment than John Hancock. However, Pace Strategic Fixed is 1.11 times less risky than John Hancock. It trades about 0.05 of its potential returns per unit of risk. John Hancock Government is currently generating about 0.02 per unit of risk. If you would invest 1,077 in Pace Strategic Fixed on September 3, 2024 and sell it today you would earn a total of 110.00 from holding Pace Strategic Fixed or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Strategic Fixed vs. John Hancock Government
Performance |
| Timeline |
| Pace Strategic Fixed |
| John Hancock Government |
Pace Strategic and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Strategic and John Hancock
The main advantage of trading using opposite Pace Strategic and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Strategic 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.| Pace Strategic vs. John Hancock Government | Pace Strategic vs. Government Securities Fund | Pace Strategic vs. Us Government Securities | Pace Strategic vs. Short Term Government Fund |
| John Hancock vs. First American Funds | John Hancock vs. Wt Mutual Fund | John Hancock vs. Transamerica Funds | John Hancock vs. Hsbc Treasury 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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