Correlation Between Invesco Variable and John Hancock
Can any of the company-specific risk be diversified away by investing in both Invesco Variable 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 Invesco Variable and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Variable Rate and John Hancock Preferred, you can compare the effects of market volatilities on Invesco Variable 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 Invesco Variable with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Variable and John Hancock.
Diversification Opportunities for Invesco Variable and John Hancock
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and John is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Variable Rate 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 Invesco Variable 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 Invesco Variable Rate 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 Invesco Variable i.e., Invesco Variable and John Hancock go up and down completely randomly.
Pair Corralation between Invesco Variable and John Hancock
Considering the 90-day investment horizon Invesco Variable is expected to generate 1.08 times less return on investment than John Hancock. But when comparing it to its historical volatility, Invesco Variable Rate is 1.16 times less risky than John Hancock. It trades about 0.16 of its potential returns per unit of risk. John Hancock Preferred is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,245 in John Hancock Preferred on August 31, 2024 and sell it today you would earn a total of 58.00 from holding John Hancock Preferred or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Variable Rate vs. John Hancock Preferred
Performance |
| Timeline |
| Invesco Variable Rate |
| John Hancock Preferred |
Invesco Variable and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Variable and John Hancock
The main advantage of trading using opposite Invesco Variable and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Variable 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.| Invesco Variable vs. VanEck Preferred Securities | Invesco Variable vs. First Trust Preferred | Invesco Variable vs. SPDR ICE Preferred | Invesco Variable vs. Global X SuperIncome |
| John Hancock vs. American Century ETF | John Hancock vs. Principal Spectrum Preferred | John Hancock vs. Fidelity Preferred Securities | John Hancock vs. Innovator SP Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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