Correlation Between Emerging Markets and J Hancock

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

By analyzing existing cross correlation between Emerging Markets Fund and J Hancock Ii, you can compare the effects of market volatilities on Emerging Markets and J 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 Emerging Markets with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and J Hancock.

Diversification Opportunities for Emerging Markets and J Hancock

-0.13

Correlation Coefficient

Emerging Markets  J Hancock

Good diversification

The 3 months correlation between Emerging and JRETX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Fund and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and Emerging Markets 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 Emerging Markets Fund are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of Emerging Markets i.e., Emerging Markets and J Hancock go up and down completely randomly.

Pair Corralation between Emerging Markets and J Hancock

Assuming the 90 days horizon Emerging Markets Fund is expected to under-perform the J Hancock. In addition to that, Emerging Markets is 1.3 times more volatile than J Hancock Ii. It trades about -0.01 of its total potential returns per unit of risk. J Hancock Ii is currently generating about 0.12 per unit of volatility. If you would invest  1,261  in J Hancock Ii on September 18, 2024 and sell it today you would earn a total of  194.00  from holding J Hancock Ii or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Emerging Markets Fund  vs.  J Hancock Ii

Emerging Markets

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Emerging Markets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

J Hancock Ii

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in J Hancock Ii are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, J 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 Emerging Markets and J Hancock

The main advantage of trading using opposite Emerging Markets and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, J 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 J Hancock will offset losses from the drop in J Hancock's long position.

The idea behind Emerging Markets Fund and J Hancock Ii 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.