Correlation Between John Hancock and SPDR Russell

Can any of the company-specific risk be diversified away by investing in both John Hancock and SPDR Russell 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 SPDR Russell 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 SPDR Russell 1000, you can compare the effects of market volatilities on John Hancock and SPDR Russell 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 SPDR Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and SPDR Russell.

Diversification Opportunities for John Hancock and SPDR Russell

0.99

Correlation Coefficient

John Hancock  SPDR Russell

No risk reduction

The 3 months correlation between John and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Multifactor and SPDR Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Russell 1000 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 SPDR Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Russell 1000 has no effect on the direction of John Hancock i.e., John Hancock and SPDR Russell go up and down completely randomly.

Pair Corralation between John Hancock and SPDR Russell

Given the investment horizon of 90 days John Hancock Multifactor is expected to generate 1.09 times more return on investment than SPDR Russell. However, John Hancock is 1.09 times more volatile than SPDR Russell 1000. It trades about 0.1 of its potential returns per unit of risk. SPDR Russell 1000 is currently generating about 0.1 per unit of risk. If you would invest  5,990  in John Hancock Multifactor on October 24, 2024 and sell it today you would earn a total of  322.00  from holding John Hancock Multifactor or generate 5.38% return on investment over 90 days.

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

John Hancock Multifactor  vs.  SPDR Russell 1000

John Hancock Multifactor

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, John Hancock is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SPDR Russell 1000

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Russell 1000 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, SPDR Russell is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and SPDR Russell

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

The idea behind John Hancock Multifactor and SPDR Russell 1000 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.