Correlation Between SPDR MSCI and John Hancock

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

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

Diversification Opportunities for SPDR MSCI and John Hancock

0.97

Correlation Coefficient

SPDR MSCI  John Hancock

Almost no diversification

The 3 months correlation between SPDR and John is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI USA and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and SPDR MSCI 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 SPDR MSCI USA 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 Multifactor has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and John Hancock go up and down completely randomly.

Pair Corralation between SPDR MSCI and John Hancock

Considering the 90-day investment horizon SPDR MSCI is expected to generate 1.69 times less return on investment than John Hancock. But when comparing it to its historical volatility, SPDR MSCI USA is 1.42 times less risky than John Hancock. It trades about 0.11 of its potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,698  in John Hancock Multifactor on May 5, 2025 and sell it today you would earn a total of  439.00  from holding John Hancock Multifactor or generate 7.7% return on investment over 90 days.

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

SPDR MSCI USA  vs.  John Hancock Multifactor

SPDR MSCI USA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI USA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SPDR MSCI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

John Hancock Multifactor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Multifactor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SPDR MSCI and John Hancock

The main advantage of trading using opposite SPDR MSCI and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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 SPDR MSCI USA and John Hancock Multifactor 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.