Correlation Between Innovator and John Hancock
Can any of the company-specific risk be diversified away by investing in both Innovator 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 Innovator and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator SP Investment and John Hancock Preferred, you can compare the effects of market volatilities on Innovator 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 Innovator with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and John Hancock.
Diversification Opportunities for Innovator and John Hancock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and John is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP Investment and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred and Innovator 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 Innovator SP Investment 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 Preferred has no effect on the direction of Innovator i.e., Innovator and John Hancock go up and down completely randomly.
Pair Corralation between Innovator and John Hancock
Given the investment horizon of 90 days Innovator is expected to generate 1.27 times less return on investment than John Hancock. In addition to that, Innovator is 1.93 times more volatile than John Hancock Preferred. It trades about 0.03 of its total potential returns per unit of risk. John Hancock Preferred is currently generating about 0.08 per unit of volatility. If you would invest 1,948 in John Hancock Preferred on August 27, 2024 and sell it today you would earn a total of 362.00 from holding John Hancock Preferred or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator SP Investment vs. John Hancock Preferred
Performance |
| Timeline |
| Innovator SP Investment |
| John Hancock Preferred |
Innovator and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and John Hancock
The main advantage of trading using opposite Innovator and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator 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.| Innovator vs. ETF Series Solutions | Innovator vs. Aquagold International | Innovator vs. Morningstar Unconstrained Allocation | Innovator vs. High Yield Municipal Fund |
| John Hancock vs. American Century ETF | John Hancock vs. Principal Spectrum Preferred | John Hancock vs. Fidelity Preferred Securities | John Hancock vs. Innovator SP Investment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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