Correlation Between John Hancock and First Trust
Can any of the company-specific risk be diversified away by investing in both John Hancock and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Income and First Trust High, you can compare the effects of market volatilities on John Hancock and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and First Trust.
Diversification Opportunities for John Hancock and First Trust
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and First is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High 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 Income are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of John Hancock i.e., John Hancock and First Trust go up and down completely randomly.
Pair Corralation between John Hancock and First Trust
If you would invest 1,222 in First Trust High on October 22, 2024 and sell it today you would earn a total of 0.00 from holding First Trust High or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
John Hancock Income vs. First Trust High
Performance |
| Timeline |
| John Hancock Income |
| First Trust High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
John Hancock and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and First Trust
The main advantage of trading using opposite John Hancock and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
| First Trust vs. Franklin Templeton Limited | First Trust vs. Blackrock Floating Rate | First Trust vs. Cohen Steers Limited | First Trust vs. Blackstone Gso Long |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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