Correlation Between John Hancock and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both John Hancock and Eaton Vance 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 Eaton Vance 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 Eaton Vance National, you can compare the effects of market volatilities on John Hancock and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Eaton Vance.
Diversification Opportunities for John Hancock and Eaton Vance
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Eaton is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Preferred and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance National has no effect on the direction of John Hancock i.e., John Hancock and Eaton Vance go up and down completely randomly.
Pair Corralation between John Hancock and Eaton Vance
Considering the 90-day investment horizon John Hancock Preferred is expected to generate 1.2 times more return on investment than Eaton Vance. However, John Hancock is 1.2 times more volatile than Eaton Vance National. It trades about 0.06 of its potential returns per unit of risk. Eaton Vance National is currently generating about 0.02 per unit of risk. If you would invest 1,194 in John Hancock Preferred on August 30, 2024 and sell it today you would earn a total of 366.00 from holding John Hancock Preferred or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
John Hancock Preferred vs. Eaton Vance National
Performance |
| Timeline |
| John Hancock Preferred |
| Eaton Vance National |
John Hancock and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Eaton Vance
The main advantage of trading using opposite John Hancock and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| John Hancock vs. Eaton Vance National | John Hancock vs. Invesco High Income | John Hancock vs. Blackrock Muniholdings Ny | John Hancock vs. Nuveen California Select |
| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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