Correlation Between IShares Preferred and John Hancock
Can any of the company-specific risk be diversified away by investing in both IShares Preferred 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 IShares Preferred and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Preferred and and John Hancock Preferred, you can compare the effects of market volatilities on IShares Preferred 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 IShares Preferred with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Preferred and John Hancock.
Diversification Opportunities for IShares Preferred and John Hancock
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and John is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Preferred and 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 IShares Preferred 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 iShares Preferred and 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 IShares Preferred i.e., IShares Preferred and John Hancock go up and down completely randomly.
Pair Corralation between IShares Preferred and John Hancock
Considering the 90-day investment horizon iShares Preferred and is expected to generate 1.69 times more return on investment than John Hancock. However, IShares Preferred is 1.69 times more volatile than John Hancock Preferred. It trades about 0.1 of its potential returns per unit of risk. John Hancock Preferred is currently generating about 0.15 per unit of risk. If you would invest 3,179 in iShares Preferred and on August 31, 2024 and sell it today you would earn a total of 96.00 from holding iShares Preferred and or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Preferred and vs. John Hancock Preferred
Performance |
| Timeline |
| iShares Preferred |
| John Hancock Preferred |
IShares Preferred and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Preferred and John Hancock
The main advantage of trading using opposite IShares Preferred and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Preferred 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.| IShares Preferred vs. Invesco Preferred ETF | IShares Preferred vs. iShares iBoxx High | IShares Preferred vs. Invesco Financial Preferred | IShares Preferred vs. SPDR Bloomberg High |
| John Hancock vs. American Century ETF | John Hancock vs. Principal Spectrum Preferred | John Hancock vs. Fidelity Preferred Securities | John Hancock vs. Innovator SP Investment |
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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