Correlation Between John Hancock and Xtrackers MSCI

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

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

Diversification Opportunities for John Hancock and Xtrackers MSCI

0.03

Correlation Coefficient

John Hancock  Xtrackers MSCI

Significant diversification

The 3 months correlation between John and Xtrackers is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and Xtrackers MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI All 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 Multifactor are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI All has no effect on the direction of John Hancock i.e., John Hancock and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between John Hancock and Xtrackers MSCI

Given the investment horizon of 90 days John Hancock Multifactor is expected to under-perform the Xtrackers MSCI. In addition to that, John Hancock is 1.28 times more volatile than Xtrackers MSCI All. It trades about -0.05 of its total potential returns per unit of risk. Xtrackers MSCI All is currently generating about 0.2 per unit of volatility. If you would invest  3,355  in Xtrackers MSCI All on December 20, 2024 and sell it today you would earn a total of  289.00  from holding Xtrackers MSCI All or generate 8.61% return on investment over 90 days.

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

John Hancock Multifactor  vs.  Xtrackers MSCI All

John Hancock Multifactor

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Multifactor has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Xtrackers MSCI All

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI All are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Xtrackers MSCI may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with John Hancock and Xtrackers MSCI

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

The idea behind John Hancock Multifactor and Xtrackers MSCI All 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.