Correlation Between Royce Opportunity and John Hancock
Can any of the company-specific risk be diversified away by investing in both Royce Opportunity 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 Royce Opportunity and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royce Opportunity Fund and John Hancock Income, you can compare the effects of market volatilities on Royce Opportunity 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 Royce Opportunity with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royce Opportunity and John Hancock.
Diversification Opportunities for Royce Opportunity and John Hancock
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royce and John is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Royce Opportunity Fund and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Royce Opportunity 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 Royce Opportunity 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 Income has no effect on the direction of Royce Opportunity i.e., Royce Opportunity and John Hancock go up and down completely randomly.
Pair Corralation between Royce Opportunity and John Hancock
Assuming the 90 days horizon Royce Opportunity Fund is expected to generate 7.61 times more return on investment than John Hancock. However, Royce Opportunity is 7.61 times more volatile than John Hancock Income. It trades about 0.17 of its potential returns per unit of risk. John Hancock Income is currently generating about 0.31 per unit of risk. If you would invest 1,541 in Royce Opportunity Fund on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Royce Opportunity Fund or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royce Opportunity Fund vs. John Hancock Income
Performance |
| Timeline |
| Royce Opportunity |
| John Hancock Income |
Royce Opportunity and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royce Opportunity and John Hancock
The main advantage of trading using opposite Royce Opportunity and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royce Opportunity 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.| Royce Opportunity vs. Clearbridge Value Trust | Royce Opportunity vs. T Rowe Price | Royce Opportunity vs. Clearbridge International Growth | Royce Opportunity vs. Davis Financial Fund |
| John Hancock vs. Queens Road Small | John Hancock vs. Valic Company I | John Hancock vs. Vanguard Small Cap Value | John Hancock vs. Royce Opportunity Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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