Correlation Between Pioneer High and John Hancock
Can any of the company-specific risk be diversified away by investing in both Pioneer High 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 Pioneer High and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer High Income and John Hancock Preferred, you can compare the effects of market volatilities on Pioneer High 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 Pioneer High with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer High and John Hancock.
Diversification Opportunities for Pioneer High and John Hancock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pioneer and John is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer High 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 Pioneer High 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 Pioneer High 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 Pioneer High i.e., Pioneer High and John Hancock go up and down completely randomly.
Pair Corralation between Pioneer High and John Hancock
Considering the 90-day investment horizon Pioneer High Income is expected to generate 0.96 times more return on investment than John Hancock. However, Pioneer High Income is 1.04 times less risky than John Hancock. It trades about 0.07 of its potential returns per unit of risk. John Hancock Preferred is currently generating about 0.05 per unit of risk. If you would invest 568.00 in Pioneer High Income on August 27, 2024 and sell it today you would earn a total of 218.00 from holding Pioneer High Income or generate 38.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer High Income vs. John Hancock Preferred
Performance |
| Timeline |
| Pioneer High Income |
| John Hancock Preferred |
Pioneer High and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer High and John Hancock
The main advantage of trading using opposite Pioneer High and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer High 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.| Pioneer High vs. MFS High Income | Pioneer High vs. MFS Investment Grade | Pioneer High vs. Eaton Vance National | Pioneer High vs. Invesco High 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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