Correlation Between Invesco Energy and John Hancock
Can any of the company-specific risk be diversified away by investing in both Invesco Energy 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 Invesco Energy and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Energy Fund and John Hancock Global, you can compare the effects of market volatilities on Invesco Energy 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 Invesco Energy with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and John Hancock.
Diversification Opportunities for Invesco Energy and John Hancock
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Invesco and John is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and John Hancock Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Global and Invesco Energy 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 Invesco Energy Fund 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 Global has no effect on the direction of Invesco Energy i.e., Invesco Energy and John Hancock go up and down completely randomly.
Pair Corralation between Invesco Energy and John Hancock
Assuming the 90 days horizon Invesco Energy Fund is expected to under-perform the John Hancock. In addition to that, Invesco Energy is 1.77 times more volatile than John Hancock Global. It trades about -0.11 of its total potential returns per unit of risk. John Hancock Global is currently generating about -0.06 per unit of volatility. If you would invest 1,251 in John Hancock Global on September 12, 2024 and sell it today you would lose (8.00) from holding John Hancock Global or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. John Hancock Global
Performance |
| Timeline |
| Invesco Energy |
| John Hancock Global |
Invesco Energy and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and John Hancock
The main advantage of trading using opposite Invesco Energy and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy 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.| Invesco Energy vs. Vanguard Energy Fund | Invesco Energy vs. Vanguard Energy Index | Invesco Energy vs. Fidelity Select Portfolios | Invesco Energy vs. Fidelity Advisor Energy |
| John Hancock vs. Dodge Global Stock | John Hancock vs. Franklin Mutual Global | John Hancock vs. T Rowe Price | John Hancock vs. HUMANA INC |
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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