Correlation Between Franklin Templeton and John Hancock
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton 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 Templeton 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 Templeton Limited and John Hancock Income, you can compare the effects of market volatilities on Franklin Templeton 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 Templeton with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and John Hancock.
Diversification Opportunities for Franklin Templeton and John Hancock
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and John is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited 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 Franklin Templeton 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 Templeton Limited 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 Franklin Templeton i.e., Franklin Templeton and John Hancock go up and down completely randomly.
Pair Corralation between Franklin Templeton and John Hancock
Considering the 90-day investment horizon Franklin Templeton Limited is expected to generate 1.35 times more return on investment than John Hancock. However, Franklin Templeton is 1.35 times more volatile than John Hancock Income. It trades about 0.27 of its potential returns per unit of risk. John Hancock Income is currently generating about -0.03 per unit of risk. If you would invest 645.00 in Franklin Templeton Limited on October 22, 2024 and sell it today you would earn a total of 23.00 from holding Franklin Templeton Limited or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. John Hancock Income
Performance |
| Timeline |
| Franklin Templeton |
| John Hancock Income |
Franklin Templeton and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and John Hancock
The main advantage of trading using opposite Franklin Templeton and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton 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 Templeton vs. MFS Investment Grade | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome | Franklin Templeton vs. RiverNorth Managed Duration |
| John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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