Correlation Between Invesco Global and John Hancock
Can any of the company-specific risk be diversified away by investing in both Invesco Global 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 Global 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 Global Strategic and John Hancock Income, you can compare the effects of market volatilities on Invesco Global 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 Global with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and John Hancock.
Diversification Opportunities for Invesco Global and John Hancock
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and John is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Strategic and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Me and Invesco Global 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 Global Strategic 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 Me has no effect on the direction of Invesco Global i.e., Invesco Global and John Hancock go up and down completely randomly.
Pair Corralation between Invesco Global and John Hancock
Assuming the 90 days horizon Invesco Global Strategic is expected to under-perform the John Hancock. In addition to that, Invesco Global is 1.87 times more volatile than John Hancock Income. It trades about -0.24 of its total potential returns per unit of risk. John Hancock Income is currently generating about -0.33 per unit of volatility. If you would invest 581.00 in John Hancock Income on January 20, 2024 and sell it today you would lose (11.00) from holding John Hancock Income or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Global Strategic vs. John Hancock Income
Performance |
| Timeline |
| Invesco Global Strategic |
| John Hancock Me |
Invesco Global and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and John Hancock
The main advantage of trading using opposite Invesco Global and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global 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 Global vs. Invesco Municipal Income | Invesco Global vs. Invesco Municipal Income | Invesco Global vs. Invesco Municipal Income | Invesco Global vs. Oppenheimer Rising Dividends |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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