Correlation Between Franklin High and John Hancock
Can any of the company-specific risk be diversified away by investing in both Franklin High 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 Franklin High and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Income and John Hancock Disciplined, you can compare the effects of market volatilities on Franklin High 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 Franklin High with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and John Hancock.
Diversification Opportunities for Franklin High and John Hancock
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and John is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Franklin High 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 Franklin High Income 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 Disciplined has no effect on the direction of Franklin High i.e., Franklin High and John Hancock go up and down completely randomly.
Pair Corralation between Franklin High and John Hancock
Assuming the 90 days horizon Franklin High is expected to generate 2.67 times less return on investment than John Hancock. But when comparing it to its historical volatility, Franklin High Income is 3.67 times less risky than John Hancock. It trades about 0.16 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,436 in John Hancock Disciplined on September 3, 2024 and sell it today you would earn a total of 312.00 from holding John Hancock Disciplined or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. John Hancock Disciplined
Performance |
| Timeline |
| Franklin High Income |
| John Hancock Disciplined |
Franklin High and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and John Hancock
The main advantage of trading using opposite Franklin High and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High 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.| Franklin High vs. Vanguard High Yield Corporate | Franklin High vs. Vanguard High Yield Porate | Franklin High vs. Blackrock Hi Yld | Franklin High vs. Blackrock High Yield |
| John Hancock vs. Dodge Cox Stock | John Hancock vs. American Funds American | John Hancock vs. American Funds American | John Hancock vs. American Mutual Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |