Correlation Between Pimco Corporate and John Hancock
Can any of the company-specific risk be diversified away by investing in both Pimco Corporate and John Hancock 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 Pimco Corporate and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Corporate Income and John Hancock Preferred, you can compare the effects of market volatilities on Pimco Corporate and John Hancock 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 Pimco Corporate with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Corporate and John Hancock.
Diversification Opportunities for Pimco Corporate and John Hancock
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pimco and John is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred and Pimco Corporate 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 Pimco Corporate Income are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Preferred has no effect on the direction of Pimco Corporate i.e., Pimco Corporate and John Hancock go up and down completely randomly.
Pair Corralation between Pimco Corporate and John Hancock
Considering the 90-day investment horizon Pimco Corporate is expected to generate 1.04 times less return on investment than John Hancock. In addition to that, Pimco Corporate is 1.06 times more volatile than John Hancock Preferred. It trades about 0.07 of its total potential returns per unit of risk. John Hancock Preferred is currently generating about 0.08 per unit of volatility. If you would invest 1,229 in John Hancock Preferred on August 31, 2024 and sell it today you would earn a total of 347.00 from holding John Hancock Preferred or generate 28.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pimco Corporate Income vs. John Hancock Preferred
Performance |
| Timeline |
| Pimco Corporate Income |
| John Hancock Preferred |
Pimco Corporate and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Corporate and John Hancock
The main advantage of trading using opposite Pimco Corporate and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Corporate position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Pimco Corporate vs. Pimco Dynamic Income | Pimco Corporate vs. Guggenheim Strategic Opportunities | Pimco Corporate vs. Pimco Dynamic Income | Pimco Corporate vs. Pimco High Income |
| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. Flaherty Crumrine Preferred | John Hancock vs. John Hancock Tax |
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 Stocks Directory module to find actively traded stocks across global markets.
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