Correlation Between John Hancock and Lazard Emerging

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

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

Diversification Opportunities for John Hancock and Lazard Emerging

0.12

Correlation Coefficient

John Hancock  Lazard Emerging

Average diversification

The 3 months correlation between John and Lazard is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and John Hancock 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 John Hancock Government are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of John Hancock i.e., John Hancock and Lazard Emerging go up and down completely randomly.

Pair Corralation between John Hancock and Lazard Emerging

Assuming the 90 days horizon John Hancock Government is expected to under-perform the Lazard Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, John Hancock Government is 2.87 times less risky than Lazard Emerging. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Lazard Emerging Markets is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,893  in Lazard Emerging Markets on September 5, 2024 and sell it today you would earn a total of  1.00  from holding Lazard Emerging Markets or generate 0.05% return on investment over 90 days.

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

John Hancock Government  vs.  Lazard Emerging Markets

John Hancock Government

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lazard Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with John Hancock and Lazard Emerging

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

The idea behind John Hancock Government and Lazard Emerging Markets 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.