Correlation Between Elfun Diversified and J Hancock
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and J 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 Elfun Diversified and J Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and J Hancock Ii, you can compare the effects of market volatilities on Elfun Diversified and J 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 Elfun Diversified with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and J Hancock.
Diversification Opportunities for Elfun Diversified and J Hancock
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elfun and JGHTX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and Elfun Diversified 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 Elfun Diversified Fund are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and J Hancock go up and down completely randomly.
Pair Corralation between Elfun Diversified and J Hancock
Assuming the 90 days horizon Elfun Diversified is expected to generate 1.21 times less return on investment than J Hancock. But when comparing it to its historical volatility, Elfun Diversified Fund is 1.56 times less risky than J Hancock. It trades about 0.11 of its potential returns per unit of risk. J Hancock Ii is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,111 in J Hancock Ii on June 12, 2025 and sell it today you would earn a total of 434.00 from holding J Hancock Ii or generate 39.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. J Hancock Ii
Performance |
| Timeline |
| Elfun Diversified |
| J Hancock Ii |
Elfun Diversified and J Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and J Hancock
The main advantage of trading using opposite Elfun Diversified and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, J 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 J Hancock will offset losses from the drop in J Hancock's long position.The idea behind Elfun Diversified Fund and J Hancock Ii 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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