Correlation Between John Hancock and Columbia Income
Can any of the company-specific risk be diversified away by investing in both John Hancock and Columbia Income 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 Columbia Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Funds and Columbia Income Opportunities, you can compare the effects of market volatilities on John Hancock and Columbia Income 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 Columbia Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Columbia Income.
Diversification Opportunities for John Hancock and Columbia Income
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Columbia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Columbia Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Income Oppo 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 Funds are associated (or correlated) with Columbia Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Income Oppo has no effect on the direction of John Hancock i.e., John Hancock and Columbia Income go up and down completely randomly.
Pair Corralation between John Hancock and Columbia Income
Assuming the 90 days horizon John Hancock Funds is expected to generate 1.53 times more return on investment than Columbia Income. However, John Hancock is 1.53 times more volatile than Columbia Income Opportunities. It trades about 0.09 of its potential returns per unit of risk. Columbia Income Opportunities is currently generating about 0.11 per unit of risk. If you would invest 940.00 in John Hancock Funds on September 5, 2024 and sell it today you would earn a total of 184.00 from holding John Hancock Funds or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
John Hancock Funds vs. Columbia Income Opportunities
Performance |
| Timeline |
| John Hancock Funds |
| Columbia Income Oppo |
John Hancock and Columbia Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Columbia Income
The main advantage of trading using opposite John Hancock and Columbia Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Columbia Income 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 Columbia Income will offset losses from the drop in Columbia Income's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Balanced | John Hancock vs. Multimanager Lifestyle Aggressive |
| Columbia Income vs. Cutler Equity | Columbia Income vs. Scharf Fund Retail | Columbia Income vs. Sarofim Equity | Columbia Income vs. Jpmorgan Equity Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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