Correlation Between Multi Index and John Hancock
Can any of the company-specific risk be diversified away by investing in both Multi Index and John 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 Multi Index and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Index 2045 Lifetime and John Hancock Variable, you can compare the effects of market volatilities on Multi Index and John 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 Multi Index with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Index and John Hancock.
Diversification Opportunities for Multi Index and John Hancock
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Multi Index 2045 Lifetime and John Hancock Variable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Variable and Multi Index 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 Multi Index 2045 Lifetime are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Variable has no effect on the direction of Multi Index i.e., Multi Index and John Hancock go up and down completely randomly.
Pair Corralation between Multi Index and John Hancock
Assuming the 90 days horizon Multi Index is expected to generate 1.92 times less return on investment than John Hancock. But when comparing it to its historical volatility, Multi Index 2045 Lifetime is 1.21 times less risky than John Hancock. It trades about 0.11 of its potential returns per unit of risk. John Hancock Variable is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,807 in John Hancock Variable on September 14, 2024 and sell it today you would earn a total of 445.00 from holding John Hancock Variable or generate 7.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Multi Index 2045 Lifetime vs. John Hancock Variable
Performance |
Timeline |
Multi Index 2045 |
John Hancock Variable |
Multi Index and John Hancock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Index and John Hancock
The main advantage of trading using opposite Multi Index and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Index position performs unexpectedly, John 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 John Hancock will offset losses from the drop in John Hancock's long position.Multi Index vs. Prudential Health Sciences | Multi Index vs. Delaware Healthcare Fund | Multi Index vs. Vanguard Health Care | Multi Index vs. Tekla Healthcare Opportunities |
John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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