Correlation Between John Hancock and Invesco Technology
Can any of the company-specific risk be diversified away by investing in both John Hancock and Invesco Technology 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 Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Government and Invesco Technology Fund, you can compare the effects of market volatilities on John Hancock and Invesco Technology 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 Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Invesco Technology.
Diversification Opportunities for John Hancock and Invesco Technology
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between John and Invesco is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology 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 Government are associated (or correlated) with Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of John Hancock i.e., John Hancock and Invesco Technology go up and down completely randomly.
Pair Corralation between John Hancock and Invesco Technology
Assuming the 90 days horizon John Hancock is expected to generate 5.25 times less return on investment than Invesco Technology. But when comparing it to its historical volatility, John Hancock Government is 4.23 times less risky than Invesco Technology. It trades about 0.08 of its potential returns per unit of risk. Invesco Technology Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,806 in Invesco Technology Fund on September 3, 2024 and sell it today you would earn a total of 1,235 from holding Invesco Technology Fund or generate 21.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Invesco Technology Fund
Performance |
| Timeline |
| John Hancock Government |
| Invesco Technology |
John Hancock and Invesco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Invesco Technology
The main advantage of trading using opposite John Hancock and Invesco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Invesco Technology 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 Technology will offset losses from the drop in Invesco Technology's long position.| John Hancock vs. First American Funds | John Hancock vs. Wt Mutual Fund | John Hancock vs. Transamerica Funds | John Hancock vs. Hsbc Treasury Money |
| Invesco Technology vs. Blackrock Government Bond | Invesco Technology vs. John Hancock Government | Invesco Technology vs. Inverse Government Long | Invesco Technology vs. Us Government Securities |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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