Correlation Between GAMCO Natural and John Hancock
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural 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 GAMCO Natural and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Natural Resources and John Hancock Income, you can compare the effects of market volatilities on GAMCO Natural 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 GAMCO Natural with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and John Hancock.
Diversification Opportunities for GAMCO Natural and John Hancock
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMCO and John is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources 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 GAMCO Natural 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 GAMCO Natural Resources 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 GAMCO Natural i.e., GAMCO Natural and John Hancock go up and down completely randomly.
Pair Corralation between GAMCO Natural and John Hancock
Considering the 90-day investment horizon GAMCO Natural Resources is expected to generate 1.65 times more return on investment than John Hancock. However, GAMCO Natural is 1.65 times more volatile than John Hancock Income. It trades about 0.1 of its potential returns per unit of risk. John Hancock Income is currently generating about 0.1 per unit of risk. If you would invest 447.00 in GAMCO Natural Resources on August 25, 2024 and sell it today you would earn a total of 135.00 from holding GAMCO Natural Resources or generate 30.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Natural Resources vs. John Hancock Income
Performance |
| Timeline |
| GAMCO Natural Resources |
| John Hancock Income |
GAMCO Natural and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Natural and John Hancock
The main advantage of trading using opposite GAMCO Natural and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural 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.| GAMCO Natural vs. MFS High Income | GAMCO Natural vs. MFS Investment Grade | GAMCO Natural vs. Eaton Vance National | GAMCO Natural vs. Invesco High Income |
| John Hancock vs. Invesco High Income | John Hancock vs. Blackrock Muniholdings Ny | John Hancock vs. MFS Investment Grade | John Hancock vs. Federated Premier Municipal |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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