Correlation Between Capital Income and John Hancock
Can any of the company-specific risk be diversified away by investing in both Capital Income 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 Capital Income and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and John Hancock Investors, you can compare the effects of market volatilities on Capital Income 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 Capital Income with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and John Hancock.
Diversification Opportunities for Capital Income and John Hancock
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capital and John is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and John Hancock Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Investors and Capital Income 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 Capital Income Builder 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 Investors has no effect on the direction of Capital Income i.e., Capital Income and John Hancock go up and down completely randomly.
Pair Corralation between Capital Income and John Hancock
Assuming the 90 days horizon Capital Income is expected to generate 1.27 times less return on investment than John Hancock. In addition to that, Capital Income is 1.21 times more volatile than John Hancock Investors. It trades about 0.08 of its total potential returns per unit of risk. John Hancock Investors is currently generating about 0.13 per unit of volatility. If you would invest 1,221 in John Hancock Investors on November 3, 2024 and sell it today you would earn a total of 183.00 from holding John Hancock Investors or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Capital Income Builder vs. John Hancock Investors
Performance |
| Timeline |
| Capital Income Builder |
| John Hancock Investors |
Capital Income and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and John Hancock
The main advantage of trading using opposite Capital Income and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income 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.| Capital Income vs. Dws Global Macro | Capital Income vs. Rbb Fund | Capital Income vs. Kinetics Global Fund | Capital Income vs. Ms Global Fixed |
| John Hancock vs. DTF Tax Free | John Hancock vs. MFS Investment Grade | John Hancock vs. Eaton Vance National | John Hancock vs. Nuveen California Select |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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