Correlation Between John Hancock and Pioneer High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Pioneer High 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 John Hancock and Pioneer High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Preferred and Pioneer High Income, you can compare the effects of market volatilities on John Hancock and Pioneer High 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 John Hancock with a short position of Pioneer High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Pioneer High.
Diversification Opportunities for John Hancock and Pioneer High
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Pioneer is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Pioneer High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer High Income and John Hancock 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 John Hancock Preferred are associated (or correlated) with Pioneer High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer High Income has no effect on the direction of John Hancock i.e., John Hancock and Pioneer High go up and down completely randomly.
Pair Corralation between John Hancock and Pioneer High
Considering the 90-day investment horizon John Hancock is expected to generate 1.43 times less return on investment than Pioneer High. In addition to that, John Hancock is 1.84 times more volatile than Pioneer High Income. It trades about 0.07 of its total potential returns per unit of risk. Pioneer High Income is currently generating about 0.19 per unit of volatility. If you would invest 698.00 in Pioneer High Income on August 30, 2024 and sell it today you would earn a total of 89.00 from holding Pioneer High Income or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Preferred vs. Pioneer High Income
Performance |
| Timeline |
| John Hancock Preferred |
| Pioneer High Income |
John Hancock and Pioneer High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Pioneer High
The main advantage of trading using opposite John Hancock and Pioneer High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Pioneer High 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 Pioneer High will offset losses from the drop in Pioneer High's long position.| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. John Hancock Tax |
| Pioneer High vs. Nuveen Floating Rate | Pioneer High vs. Blackrock Muni Intermediate | Pioneer High vs. Eaton Vance Senior | Pioneer High vs. Virtus Global Multi |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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