Correlation Between John Hancock and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both John Hancock and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Financial and Eaton Vance Tax, you can compare the effects of market volatilities on John Hancock and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Eaton Vance.
Diversification Opportunities for John Hancock and Eaton Vance
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Eaton is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax 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 Financial are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Tax has no effect on the direction of John Hancock i.e., John Hancock and Eaton Vance go up and down completely randomly.
Pair Corralation between John Hancock and Eaton Vance
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.71 times more return on investment than Eaton Vance. However, John Hancock is 1.71 times more volatile than Eaton Vance Tax. It trades about 0.1 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.1 per unit of risk. If you would invest 2,746 in John Hancock Financial on September 4, 2024 and sell it today you would earn a total of 1,174 from holding John Hancock Financial or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Eaton Vance Tax
Performance |
| Timeline |
| John Hancock Financial |
| Eaton Vance Tax |
John Hancock and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Eaton Vance
The main advantage of trading using opposite John Hancock and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
| Eaton Vance vs. Calamos Convertible And | Eaton Vance vs. Calamos Strategic Total | Eaton Vance vs. Calamos Dynamic Convertible | Eaton Vance vs. Calamos LongShort Equity |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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