Correlation Between Eaton Vance and John Hancock
Can any of the company-specific risk be diversified away by investing in both Eaton Vance 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 Eaton Vance and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Mbf and John Hancock Income, you can compare the effects of market volatilities on Eaton Vance 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 Eaton Vance with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and John Hancock.
Diversification Opportunities for Eaton Vance and John Hancock
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and John is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Mbf and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Eaton Vance 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 Eaton Vance Mbf 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 Income has no effect on the direction of Eaton Vance i.e., Eaton Vance and John Hancock go up and down completely randomly.
Pair Corralation between Eaton Vance and John Hancock
Considering the 90-day investment horizon Eaton Vance is expected to generate 1.4 times less return on investment than John Hancock. In addition to that, Eaton Vance is 1.23 times more volatile than John Hancock Income. It trades about 0.07 of its total potential returns per unit of risk. John Hancock Income is currently generating about 0.12 per unit of volatility. If you would invest 1,076 in John Hancock Income on August 28, 2024 and sell it today you would earn a total of 80.00 from holding John Hancock Income or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Mbf vs. John Hancock Income
Performance |
| Timeline |
| Eaton Vance Mbf |
| John Hancock Income |
Eaton Vance and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and John Hancock
The main advantage of trading using opposite Eaton Vance and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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.| Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance California | Eaton Vance vs. Eaton Vance New | Eaton Vance vs. BlackRock Municipal Income |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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