Correlation Between Pimco Fundamental and John Hancock
Can any of the company-specific risk be diversified away by investing in both Pimco Fundamental 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 Fundamental 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 Fundamental Advantage and John Hancock Financial, you can compare the effects of market volatilities on Pimco Fundamental 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 Fundamental with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Fundamental and John Hancock.
Diversification Opportunities for Pimco Fundamental and John Hancock
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pimco and John is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Fundamental Advantage and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Pimco Fundamental 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 Fundamental Advantage 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 Financial has no effect on the direction of Pimco Fundamental i.e., Pimco Fundamental and John Hancock go up and down completely randomly.
Pair Corralation between Pimco Fundamental and John Hancock
Assuming the 90 days horizon Pimco Fundamental is expected to generate 16.81 times less return on investment than John Hancock. But when comparing it to its historical volatility, Pimco Fundamental Advantage is 3.7 times less risky than John Hancock. It trades about 0.02 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,458 in John Hancock Financial on September 12, 2024 and sell it today you would earn a total of 1,434 from holding John Hancock Financial or generate 58.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Fundamental Advantage vs. John Hancock Financial
Performance |
| Timeline |
| Pimco Fundamental |
| John Hancock Financial |
Pimco Fundamental and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Fundamental and John Hancock
The main advantage of trading using opposite Pimco Fundamental and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Fundamental 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 Fundamental vs. Ep Emerging Markets | Pimco Fundamental vs. Ab All Market | Pimco Fundamental vs. Ashmore Emerging Markets | Pimco Fundamental vs. Sp Midcap Index |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Stocks Directory module to find actively traded stocks across global markets.
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