Correlation Between WisdomTree and John Hancock
Can any of the company-specific risk be diversified away by investing in both WisdomTree 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 WisdomTree and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and John Hancock Income, you can compare the effects of market volatilities on WisdomTree 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 WisdomTree with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and John Hancock.
Diversification Opportunities for WisdomTree and John Hancock
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and John is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree 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 WisdomTree 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 WisdomTree 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 WisdomTree i.e., WisdomTree and John Hancock go up and down completely randomly.
Pair Corralation between WisdomTree and John Hancock
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 3.62 times more return on investment than John Hancock. However, WisdomTree is 3.62 times more volatile than John Hancock Income. It trades about 0.39 of its potential returns per unit of risk. John Hancock Income is currently generating about -0.03 per unit of risk. If you would invest 1,041 in WisdomTree on August 28, 2024 and sell it today you would earn a total of 179.00 from holding WisdomTree or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree vs. John Hancock Income
Performance |
| Timeline |
| WisdomTree |
| John Hancock Income |
WisdomTree and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and John Hancock
The main advantage of trading using opposite WisdomTree and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree 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.| WisdomTree vs. Invesco Advantage MIT | WisdomTree vs. Invesco Municipal Trust | WisdomTree vs. Invesco California Value | WisdomTree vs. Victory Capital Holdings |
| John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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