Correlation Between John Hancock and Franklin High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Franklin 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 Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Ii and Franklin High Yield, you can compare the effects of market volatilities on John Hancock and Franklin 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 Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Franklin High.
Diversification Opportunities for John Hancock and Franklin High
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Franklin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Ii and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin 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 Ii are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of John Hancock i.e., John Hancock and Franklin High go up and down completely randomly.
Pair Corralation between John Hancock and Franklin High
Assuming the 90 days horizon John Hancock Ii is expected to generate 3.84 times more return on investment than Franklin High. However, John Hancock is 3.84 times more volatile than Franklin High Yield. It trades about 0.07 of its potential returns per unit of risk. Franklin High Yield is currently generating about -0.17 per unit of risk. If you would invest 1,895 in John Hancock Ii on September 20, 2024 and sell it today you would earn a total of 21.00 from holding John Hancock Ii or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
John Hancock Ii vs. Franklin High Yield
Performance |
| Timeline |
| John Hancock Ii |
| Franklin High Yield |
John Hancock and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Franklin High
The main advantage of trading using opposite John Hancock and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Franklin 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 Franklin High will offset losses from the drop in Franklin High's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
| Franklin High vs. John Hancock Ii | Franklin High vs. Queens Road Small | Franklin High vs. Northern Small Cap | Franklin High vs. Royce Opportunity Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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