Correlation Between John Hancock and Pimco Income
Can any of the company-specific risk be diversified away by investing in both John Hancock and Pimco Income 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 Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Premium and Pimco Income Strategy, you can compare the effects of market volatilities on John Hancock and Pimco Income 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 Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Pimco Income.
Diversification Opportunities for John Hancock and Pimco Income
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between John and Pimco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Premium and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy 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 Premium are associated (or correlated) with Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of John Hancock i.e., John Hancock and Pimco Income go up and down completely randomly.
Pair Corralation between John Hancock and Pimco Income
Considering the 90-day investment horizon John Hancock Premium is expected to generate 1.72 times more return on investment than Pimco Income. However, John Hancock is 1.72 times more volatile than Pimco Income Strategy. It trades about 0.24 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.05 per unit of risk. If you would invest 1,267 in John Hancock Premium on September 2, 2024 and sell it today you would earn a total of 56.00 from holding John Hancock Premium or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Premium vs. Pimco Income Strategy
Performance |
| Timeline |
| John Hancock Premium |
| Pimco Income Strategy |
John Hancock and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Pimco Income
The main advantage of trading using opposite John Hancock and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Pimco Income 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| John Hancock vs. John Hancock Preferred | John Hancock vs. Eaton Vance Tax | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred |
| Pimco Income vs. PIMCO Access Income | Pimco Income vs. Pimco High Income | Pimco Income vs. Pimco Corporate Income | Pimco Income 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |