Correlation Between Goldman Sachs and John Hancock

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

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

Diversification Opportunities for Goldman Sachs and John Hancock

0.82

Correlation Coefficient

Goldman Sachs  John Hancock

Very poor diversification

The 3 months correlation between Goldman and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs International 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 Goldman Sachs 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 Goldman Sachs International 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 Goldman Sachs i.e., Goldman Sachs and John Hancock go up and down completely randomly.

Pair Corralation between Goldman Sachs and John Hancock

Assuming the 90 days horizon Goldman Sachs International is expected to generate 1.0 times more return on investment than John Hancock. However, Goldman Sachs is 1.0 times more volatile than John Hancock Funds. It trades about 0.19 of its potential returns per unit of risk. John Hancock Funds is currently generating about 0.15 per unit of risk. If you would invest  1,221  in Goldman Sachs International on December 21, 2024 and sell it today you would earn a total of  116.00  from holding Goldman Sachs International or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.31%
Values	Daily Returns

Goldman Sachs International  vs.  John Hancock Funds

Goldman Sachs Intern

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs International are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

John Hancock Funds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Funds are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Goldman Sachs and John Hancock

The main advantage of trading using opposite Goldman Sachs and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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 Goldman Sachs International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.