Correlation Between Gabelli Equity and John Hancock
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity 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 Gabelli Equity and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Equity and John Hancock Income, you can compare the effects of market volatilities on Gabelli Equity 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 Gabelli Equity with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and John Hancock.
Diversification Opportunities for Gabelli Equity and John Hancock
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gabelli and John is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity 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 Gabelli Equity 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 The Gabelli Equity 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 Gabelli Equity i.e., Gabelli Equity and John Hancock go up and down completely randomly.
Pair Corralation between Gabelli Equity and John Hancock
Assuming the 90 days trading horizon The Gabelli Equity is expected to under-perform the John Hancock. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Equity is 1.19 times less risky than John Hancock. The preferred stock trades about -0.19 of its potential returns per unit of risk. The John Hancock Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,140 in John Hancock Income on September 1, 2024 and sell it today you would earn a total of 9.00 from holding John Hancock Income or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. John Hancock Income
Performance |
| Timeline |
| Gabelli Equity |
| John Hancock Income |
Gabelli Equity and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and John Hancock
The main advantage of trading using opposite Gabelli Equity and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity 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.| Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Oxford Lane Capital | Gabelli Equity vs. The Gabelli Utility |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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