Correlation Between John Hancock and Investor
Can any of the company-specific risk be diversified away by investing in both John Hancock and Investor 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 Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Tax Advantaged and Investor AB ser, you can compare the effects of market volatilities on John Hancock and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Investor.
Diversification Opportunities for John Hancock and Investor
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Investor is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Tax Advantaged and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Tax Advantaged are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of John Hancock i.e., John Hancock and Investor go up and down completely randomly.
Pair Corralation between John Hancock and Investor
Considering the 90-day investment horizon John Hancock is expected to generate 1.28 times less return on investment than Investor. But when comparing it to its historical volatility, John Hancock Tax Advantaged is 1.89 times less risky than Investor. It trades about 0.1 of its potential returns per unit of risk. Investor AB ser is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Investor AB ser on January 24, 2024 and sell it today you would earn a total of 450.00 from holding Investor AB ser or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.51% |
| Values | Daily Returns |
John Hancock Tax Advantaged vs. Investor AB ser
Performance |
| Timeline |
| John Hancock Tax |
| Investor AB ser |
John Hancock and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Investor
The main advantage of trading using opposite John Hancock and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| John Hancock vs. Virtus Global Multi | John Hancock vs. Brandywineglobal Globalome Opportunities | John Hancock vs. RiverNorth Specialty Finance | John Hancock vs. Western Asset Mortgage |
| Investor vs. Tri Continental Closed | Investor vs. Adams Natural Resources | Investor vs. Adams Diversified Equity | Investor vs. Schroders PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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