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 Eurozone, 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

-0.19

Correlation Coefficient

John Hancock  Xtrackers MSCI

Good diversification

The 3 months correlation between John and Xtrackers is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and Xtrackers MSCI Eurozone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Eurozone 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 Eurozone 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 generate 0.99 times more return on investment than Xtrackers MSCI. However, John Hancock Multifactor is 1.01 times less risky than Xtrackers MSCI. It trades about 0.1 of its potential returns per unit of risk. Xtrackers MSCI Eurozone is currently generating about 0.06 per unit of risk. If you would invest  4,873  in John Hancock Multifactor on October 10, 2024 and sell it today you would earn a total of  2,127  from holding John Hancock Multifactor or generate 43.65% return on investment over 90 days.

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

John Hancock Multifactor  vs.  Xtrackers MSCI Eurozone

John Hancock Multifactor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Eurozone

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI Eurozone are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Xtrackers MSCI is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 Eurozone 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.