Correlation Between John Hancock and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both John Hancock and Putnam Convertible 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 Putnam Convertible 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 Putnam Convertible Incm Gwth, you can compare the effects of market volatilities on John Hancock and Putnam Convertible 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 Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Putnam Convertible.
Diversification Opportunities for John Hancock and Putnam Convertible
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Putnam Convertible Incm Gwth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible Incm 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 Putnam Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Convertible Incm has no effect on the direction of John Hancock i.e., John Hancock and Putnam Convertible go up and down completely randomly.
Pair Corralation between John Hancock and Putnam Convertible
Considering the 90-day investment horizon John Hancock Financial is expected to generate 1.51 times more return on investment than Putnam Convertible. However, John Hancock is 1.51 times more volatile than Putnam Convertible Incm Gwth. It trades about 0.09 of its potential returns per unit of risk. Putnam Convertible Incm Gwth is currently generating about 0.09 per unit of risk. If you would invest 3,800 in John Hancock Financial on September 13, 2024 and sell it today you would earn a total of 55.00 from holding John Hancock Financial or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Putnam Convertible Incm Gwth
Performance |
| Timeline |
| John Hancock Financial |
| Putnam Convertible Incm |
John Hancock and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Putnam Convertible
The main advantage of trading using opposite John Hancock and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Putnam Convertible 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 Putnam Convertible will offset losses from the drop in Putnam Convertible'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 |
| Putnam Convertible vs. Legg Mason Global | Putnam Convertible vs. Scharf Global Opportunity | Putnam Convertible vs. Siit Global Managed | Putnam Convertible vs. Ab Global Risk |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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