Correlation Between Prudential Total and John Hancock
Can any of the company-specific risk be diversified away by investing in both Prudential Total 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 Prudential Total and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Total Return and John Hancock Bond, you can compare the effects of market volatilities on Prudential Total 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 Prudential Total with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Total and John Hancock.
Diversification Opportunities for Prudential Total and John Hancock
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Prudential and John is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Total Return and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond and Prudential Total 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 Prudential Total Return 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 Bond has no effect on the direction of Prudential Total i.e., Prudential Total and John Hancock go up and down completely randomly.
Pair Corralation between Prudential Total and John Hancock
Assuming the 90 days horizon Prudential Total is expected to generate 1.1 times less return on investment than John Hancock. But when comparing it to its historical volatility, Prudential Total Return is 1.03 times less risky than John Hancock. It trades about 0.11 of its potential returns per unit of risk. John Hancock Bond is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,348 in John Hancock Bond on September 1, 2024 and sell it today you would earn a total of 13.00 from holding John Hancock Bond or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential Total Return vs. John Hancock Bond
Performance |
| Timeline |
| Prudential Total Return |
| John Hancock Bond |
Prudential Total and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Total and John Hancock
The main advantage of trading using opposite Prudential Total and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Total 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.| Prudential Total vs. John Hancock Bond | Prudential Total vs. Mfs International Diversification | Prudential Total vs. Franklin Dynatech Fund | Prudential Total vs. Lord Abbett Bond |
| John Hancock vs. John Hancock Disciplined | John Hancock vs. John Hancock Global | John Hancock vs. Aquagold International | John Hancock vs. Thrivent High Yield |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |