Correlation Between John Hancock and Virtus High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Virtus 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 Virtus High 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 Virtus High Yield, you can compare the effects of market volatilities on John Hancock and Virtus 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 Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Virtus High.
Diversification Opportunities for John Hancock and Virtus High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Virtus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Funds and Virtus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus High Yield 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 Virtus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus High Yield has no effect on the direction of John Hancock i.e., John Hancock and Virtus High go up and down completely randomly.
Pair Corralation between John Hancock and Virtus High
Assuming the 90 days horizon John Hancock Funds is expected to generate 3.66 times more return on investment than Virtus High. However, John Hancock is 3.66 times more volatile than Virtus High Yield. It trades about 0.1 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.23 per unit of risk. If you would invest 1,287 in John Hancock Funds on September 3, 2024 and sell it today you would earn a total of 125.00 from holding John Hancock Funds or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Funds vs. Virtus High Yield
Performance |
| Timeline |
| John Hancock Funds |
| Virtus High Yield |
John Hancock and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Virtus High
The main advantage of trading using opposite John Hancock and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Virtus 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 Virtus High will offset losses from the drop in Virtus High's long position.| John Hancock vs. American Funds Growth | John Hancock vs. American Funds Growth | John Hancock vs. Franklin Mutual Shares | John Hancock vs. Franklin Mutual Shares |
| Virtus High vs. Ppm High Yield | Virtus High vs. Guggenheim High Yield | Virtus High vs. Fidelity Capital Income | Virtus High vs. Pace High Yield |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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