Correlation Between Equity Income and John Hancock
Can any of the company-specific risk be diversified away by investing in both Equity Income 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 Equity Income and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Income Fund and John Hancock Disciplined, you can compare the effects of market volatilities on Equity Income 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 Equity Income with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Income and John Hancock.
Diversification Opportunities for Equity Income and John Hancock
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Equity Income Fund and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Equity Income 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 Equity Income Fund 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 Disciplined has no effect on the direction of Equity Income i.e., Equity Income and John Hancock go up and down completely randomly.
Pair Corralation between Equity Income and John Hancock
Assuming the 90 days horizon Equity Income is expected to generate 1.3 times less return on investment than John Hancock. But when comparing it to its historical volatility, Equity Income Fund is 1.16 times less risky than John Hancock. It trades about 0.07 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,074 in John Hancock Disciplined on August 29, 2024 and sell it today you would earn a total of 791.00 from holding John Hancock Disciplined or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Income Fund vs. John Hancock Disciplined
Performance |
| Timeline |
| Equity Income |
| John Hancock Disciplined |
Equity Income and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Income and John Hancock
The main advantage of trading using opposite Equity Income and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Income 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.| Equity Income vs. Principal Capital Appreciation | Equity Income vs. Diversified International Fund | Equity Income vs. Brown Advisory Growth | Equity Income vs. Midcap Fund Class |
| John Hancock vs. Artisan Global Unconstrained | John Hancock vs. Morgan Stanley Global | John Hancock vs. Wisdomtree Siegel Global | John Hancock vs. Power Global Tactical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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