Correlation Between Xtrackers MSCI and John Hancock

Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers MSCI Eurozone and John Hancock Multifactor, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and John Hancock.

Diversification Opportunities for Xtrackers MSCI and John Hancock

-0.19

Correlation Coefficient

Xtrackers MSCI  John Hancock

Good diversification

The 3 months correlation between Xtrackers and John is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Eurozone and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Xtrackers MSCI 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 Xtrackers MSCI Eurozone 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 Multifactor has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and John Hancock go up and down completely randomly.

Pair Corralation between Xtrackers MSCI and John Hancock

Given the investment horizon of 90 days Xtrackers MSCI is expected to generate 1.55 times less return on investment than John Hancock. In addition to that, Xtrackers MSCI is 1.01 times more volatile than John Hancock Multifactor. It trades about 0.06 of its total potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.1 per unit of volatility. If you would invest  4,873  in John Hancock Multifactor on October 10, 2024 and sell it today you would earn a total of  2,127  from holding John Hancock Multifactor or generate 43.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Xtrackers MSCI Eurozone  vs.  John Hancock Multifactor

Xtrackers MSCI Eurozone

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI Eurozone are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Xtrackers MSCI is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Multifactor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, John Hancock is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Xtrackers MSCI and John Hancock

The main advantage of trading using opposite Xtrackers MSCI and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.

The idea behind Xtrackers MSCI Eurozone and John Hancock Multifactor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.