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 Tax, 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
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and John is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Corporate Income and John Hancock Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Tax 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 Tax 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 2.22 times less return on investment than John Hancock. But when comparing it to its historical volatility, Pimco Corporate Income is 2.99 times less risky than John Hancock. It trades about 0.39 of its potential returns per unit of risk. John Hancock Tax is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,198 in John Hancock Tax on November 8, 2024 and sell it today you would earn a total of 120.00 from holding John Hancock Tax or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Corporate Income vs. John Hancock Tax
Performance |
| Timeline |
| Pimco Corporate Income |
| John Hancock Tax |
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 Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. Pimco Corporate Income |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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