Correlation Between Dreyfus/standish and John Hancock

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

By analyzing existing cross correlation between Dreyfusstandish Global Fixed and John Hancock Funds, you can compare the effects of market volatilities on Dreyfus/standish 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 Dreyfus/standish with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and John Hancock.

Diversification Opportunities for Dreyfus/standish and John Hancock

0.77

Correlation Coefficient

Dreyfus/standish  John Hancock

Poor diversification

The 3 months correlation between Dreyfus/standish and John is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and John Hancock Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Funds and Dreyfus/standish 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 Dreyfusstandish Global Fixed 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 Funds has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and John Hancock go up and down completely randomly.

Pair Corralation between Dreyfus/standish and John Hancock

Assuming the 90 days horizon Dreyfusstandish Global Fixed is expected to under-perform the John Hancock. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dreyfusstandish Global Fixed is 1.65 times less risky than John Hancock. The mutual fund trades about -0.06 of its potential returns per unit of risk. The John Hancock Funds is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,077  in John Hancock Funds on October 21, 2024 and sell it today you would earn a total of  10.00  from holding John Hancock Funds or generate 0.93% return on investment over 90 days.

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

Dreyfusstandish Global Fixed  vs.  John Hancock Funds

Dreyfusstandish Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfusstandish Global Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Dreyfus/standish is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dreyfus/standish and John Hancock

The main advantage of trading using opposite Dreyfus/standish and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus/standish 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 Dreyfusstandish Global Fixed and John Hancock Funds 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.