Correlation Between Us Government and John Hancock
Can any of the company-specific risk be diversified away by investing in both Us 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 Us 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 Us Government Securities and John Hancock Government, you can compare the effects of market volatilities on Us 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 Us Government with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and John Hancock.
Diversification Opportunities for Us Government and John Hancock
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between UGSFX and John is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities 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 Us 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 Us Government Securities 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 Us Government i.e., Us Government and John Hancock go up and down completely randomly.
Pair Corralation between Us Government and John Hancock
Assuming the 90 days horizon Us Government is expected to generate 2.21 times less return on investment than John Hancock. But when comparing it to its historical volatility, Us Government Securities is 1.13 times less risky than John Hancock. It trades about 0.03 of its potential returns per unit of risk. John Hancock Government is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 779.00 in John Hancock Government on August 27, 2024 and sell it today you would earn a total of 3.00 from holding John Hancock Government or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. John Hancock Government
Performance |
| Timeline |
| Us Government Securities |
| John Hancock Government |
Us Government and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and John Hancock
The main advantage of trading using opposite Us Government and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us 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.| Us Government vs. Bond Fund Of | Us Government vs. Capital World Bond | Us Government vs. American Mutual Fund | Us Government vs. Smallcap World Fund |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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