Correlation Between Government Securities and John Hancock
Can any of the company-specific risk be diversified away by investing in both Government Securities 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 Government Securities and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Government Securities Fund and John Hancock Disciplined, you can compare the effects of market volatilities on Government Securities 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 Government Securities with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Government Securities and John Hancock.
Diversification Opportunities for Government Securities and John Hancock
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Government and JOHN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Government Securities Fund and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Government Securities 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 Government Securities Fund 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 Disciplined has no effect on the direction of Government Securities i.e., Government Securities and John Hancock go up and down completely randomly.
Pair Corralation between Government Securities and John Hancock
Assuming the 90 days horizon Government Securities is expected to generate 5.95 times less return on investment than John Hancock. But when comparing it to its historical volatility, Government Securities Fund is 3.69 times less risky than John Hancock. It trades about 0.17 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,588 in John Hancock Disciplined on September 2, 2024 and sell it today you would earn a total of 160.00 from holding John Hancock Disciplined or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Government Securities Fund vs. John Hancock Disciplined
Performance |
| Timeline |
| Government Securities |
| John Hancock Disciplined |
Government Securities and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Government Securities and John Hancock
The main advantage of trading using opposite Government Securities and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Government Securities 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.| Government Securities vs. Sarofim Equity | Government Securities vs. Ms Global Fixed | Government Securities vs. Balanced Fund Retail | Government Securities vs. Ultra Short Fixed Income |
| John Hancock vs. Us Vector Equity | John Hancock vs. Balanced Fund Retail | John Hancock vs. Small Cap Equity | John Hancock vs. Calamos Global Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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