Correlation Between John Hancock and Invesco Global
Can any of the company-specific risk be diversified away by investing in both John Hancock and Invesco Global 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 Invesco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Enduring and Invesco Global Infrastructure, you can compare the effects of market volatilities on John Hancock and Invesco Global 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 Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Invesco Global.
Diversification Opportunities for John Hancock and Invesco Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Invesco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Enduring and Invesco Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Infra 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 Enduring are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Infra has no effect on the direction of John Hancock i.e., John Hancock and Invesco Global go up and down completely randomly.
Pair Corralation between John Hancock and Invesco Global
Assuming the 90 days horizon John Hancock is expected to generate 1.46 times less return on investment than Invesco Global. But when comparing it to its historical volatility, John Hancock Enduring is 1.03 times less risky than Invesco Global. It trades about 0.23 of its potential returns per unit of risk. Invesco Global Infrastructure is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,253 in Invesco Global Infrastructure on August 30, 2024 and sell it today you would earn a total of 54.00 from holding Invesco Global Infrastructure or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Enduring vs. Invesco Global Infrastructure
Performance |
| Timeline |
| John Hancock Enduring |
| Invesco Global Infra |
John Hancock and Invesco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Invesco Global
The main advantage of trading using opposite John Hancock and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Invesco Global 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 Invesco Global will offset losses from the drop in Invesco Global's long position.| John Hancock vs. Nasdaq 100 Index Fund | John Hancock vs. Issachar Fund Class | John Hancock vs. T Rowe Price | John Hancock vs. Nova Fund Class |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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