Correlation Between John Hancock and Janus Multi-sector
Can any of the company-specific risk be diversified away by investing in both John Hancock and Janus Multi-sector 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 John Hancock and Janus Multi-sector into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Income and Janus Multi Sector Income, you can compare the effects of market volatilities on John Hancock and Janus Multi-sector 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 John Hancock with a short position of Janus Multi-sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Janus Multi-sector.
Diversification Opportunities for John Hancock and Janus Multi-sector
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Janus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Janus Multi Sector Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Multi Sector and John Hancock 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 John Hancock Income are associated (or correlated) with Janus Multi-sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Multi Sector has no effect on the direction of John Hancock i.e., John Hancock and Janus Multi-sector go up and down completely randomly.
Pair Corralation between John Hancock and Janus Multi-sector
Assuming the 90 days horizon John Hancock Income is expected to under-perform the Janus Multi-sector. In addition to that, John Hancock is 1.0 times more volatile than Janus Multi Sector Income. It trades about -0.26 of its total potential returns per unit of risk. Janus Multi Sector Income is currently generating about -0.14 per unit of volatility. If you would invest 851.00 in Janus Multi Sector Income on January 25, 2024 and sell it today you would lose (8.00) from holding Janus Multi Sector Income or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Income vs. Janus Multi Sector Income
Performance |
| Timeline |
| John Hancock Me |
| Janus Multi Sector |
John Hancock and Janus Multi-sector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Janus Multi-sector
The main advantage of trading using opposite John Hancock and Janus Multi-sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Janus Multi-sector 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 Janus Multi-sector will offset losses from the drop in Janus Multi-sector's long position.The idea behind John Hancock Income and Janus Multi Sector Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Janus Multi-sector vs. Merck Company | Janus Multi-sector vs. Chevron Corp | Janus Multi-sector vs. MagnaChip Semiconductor |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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