Correlation Between Goldman Sachs and John Hancock

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

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

Diversification Opportunities for Goldman Sachs and John Hancock

-0.8

Correlation Coefficient

Goldman Sachs  John Hancock

Pay attention - limited upside

The 3 months correlation between Goldman and John is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and John Hancock Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investment and Goldman Sachs 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 Goldman Sachs Clean 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 Investment has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and John Hancock go up and down completely randomly.

Pair Corralation between Goldman Sachs and John Hancock

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the John Hancock. In addition to that, Goldman Sachs is 1.59 times more volatile than John Hancock Investment. It trades about -0.19 of its total potential returns per unit of risk. John Hancock Investment is currently generating about 0.19 per unit of volatility. If you would invest  7,649  in John Hancock Investment on September 12, 2024 and sell it today you would earn a total of  658.00  from holding John Hancock Investment or generate 8.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Goldman Sachs Clean  vs.  John Hancock Investment

Goldman Sachs Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Clean has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

John Hancock Investment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Investment are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Goldman Sachs and John Hancock

The main advantage of trading using opposite Goldman Sachs and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.

The idea behind Goldman Sachs Clean and John Hancock Investment 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.