Correlation Between Invesco High and John Hancock
Can any of the company-specific risk be diversified away by investing in both Invesco High 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 High 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 High Income and John Hancock Premium, you can compare the effects of market volatilities on Invesco High 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 High with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and John Hancock.
Diversification Opportunities for Invesco High and John Hancock
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and John is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and John Hancock Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Premium and Invesco High 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 High Income 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 Premium has no effect on the direction of Invesco High i.e., Invesco High and John Hancock go up and down completely randomly.
Pair Corralation between Invesco High and John Hancock
Given the investment horizon of 90 days Invesco High is expected to generate 4.97 times less return on investment than John Hancock. But when comparing it to its historical volatility, Invesco High Income is 2.19 times less risky than John Hancock. It trades about 0.07 of its potential returns per unit of risk. John Hancock Premium is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,111 in John Hancock Premium on September 1, 2024 and sell it today you would earn a total of 212.00 from holding John Hancock Premium or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. John Hancock Premium
Performance |
| Timeline |
| Invesco High Income |
| John Hancock Premium |
Invesco High and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and John Hancock
The main advantage of trading using opposite Invesco High and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High 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 High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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