Correlation Between John Hancock and Western Asset
Can any of the company-specific risk be diversified away by investing in both John Hancock and Western Asset 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 Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on John Hancock and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Western Asset.
Diversification Opportunities for John Hancock and Western Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between John and Western is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of John Hancock i.e., John Hancock and Western Asset go up and down completely randomly.
Pair Corralation between John Hancock and Western Asset
Assuming the 90 days horizon John Hancock Government is expected to under-perform the Western Asset. In addition to that, John Hancock is 1.48 times more volatile than Western Asset Intermediate. It trades about -0.08 of its total potential returns per unit of risk. Western Asset Intermediate is currently generating about -0.1 per unit of volatility. If you would invest 966.00 in Western Asset Intermediate on August 24, 2024 and sell it today you would lose (5.00) from holding Western Asset Intermediate or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Western Asset Intermediate
Performance |
| Timeline |
| John Hancock Government |
| Western Asset Interm |
John Hancock and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Western Asset
The main advantage of trading using opposite John Hancock and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| John Hancock vs. Vanguard Gnma Fund | John Hancock vs. Vanguard Intermediate Term Government | John Hancock vs. Us Government Securities | John Hancock vs. Us Government Securities |
| Western Asset vs. Invesco Government Fund | Western Asset vs. John Hancock Government | Western Asset vs. Us Government Securities | Western Asset vs. Virtus Seix Government |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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