Correlation Between Global Diversified and John Hancock
Can any of the company-specific risk be diversified away by investing in both Global Diversified 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 Global Diversified and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Diversified Income and John Hancock Global, you can compare the effects of market volatilities on Global Diversified 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 Global Diversified with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Diversified and John Hancock.
Diversification Opportunities for Global Diversified and John Hancock
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and John is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Global Diversified Income 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 Global Diversified 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 Global Diversified Income 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 Global Diversified i.e., Global Diversified and John Hancock go up and down completely randomly.
Pair Corralation between Global Diversified and John Hancock
Assuming the 90 days horizon Global Diversified is expected to generate 1.62 times less return on investment than John Hancock. But when comparing it to its historical volatility, Global Diversified Income is 2.86 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 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,017 in John Hancock Global on November 2, 2024 and sell it today you would earn a total of 178.00 from holding John Hancock Global or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Diversified Income vs. John Hancock Global
Performance |
| Timeline |
| Global Diversified Income |
| John Hancock Global |
Global Diversified and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Diversified and John Hancock
The main advantage of trading using opposite Global Diversified and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Diversified 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.| Global Diversified vs. Leader Short Term Bond | Global Diversified vs. Barings Active Short | Global Diversified vs. Blackrock Short Obligations | Global Diversified vs. Delaware Investments Ultrashort |
| John Hancock vs. Praxis Small Cap | John Hancock vs. Small Pany Growth | John Hancock vs. Tax Managed Mid Small | John Hancock vs. Sp Smallcap 600 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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