Correlation Between Inverse Government and John Hancock
Can any of the company-specific risk be diversified away by investing in both Inverse Government 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 Inverse Government and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Government Long and John Hancock Government, you can compare the effects of market volatilities on Inverse Government 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 Inverse Government with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Government and John Hancock.
Diversification Opportunities for Inverse Government and John Hancock
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inverse and John is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Government Long 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 Inverse Government 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 Inverse Government Long 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 Inverse Government i.e., Inverse Government and John Hancock go up and down completely randomly.
Pair Corralation between Inverse Government and John Hancock
Assuming the 90 days horizon Inverse Government Long is expected to generate 2.64 times more return on investment than John Hancock. However, Inverse Government is 2.64 times more volatile than John Hancock Government. It trades about 0.08 of its potential returns per unit of risk. John Hancock Government is currently generating about -0.07 per unit of risk. If you would invest 19,170 in Inverse Government Long on August 24, 2024 and sell it today you would earn a total of 280.00 from holding Inverse Government Long or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Government Long vs. John Hancock Government
Performance |
| Timeline |
| Inverse Government Long |
| John Hancock Government |
Inverse Government and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Government and John Hancock
The main advantage of trading using opposite Inverse Government and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Government 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.| Inverse Government vs. Mid Cap Value Profund | Inverse Government vs. Amg River Road | Inverse Government vs. Valic Company I | Inverse Government vs. Queens Road Small |
| John Hancock vs. Vanguard Gnma Fund | John Hancock vs. Us Government Securities | John Hancock vs. Us Government Securities | John Hancock vs. American Funds Government |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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