Correlation Between John Hancock and Pioneer Solutions

Can any of the company-specific risk be diversified away by investing in both John Hancock and Pioneer Solutions 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 Pioneer Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between John Hancock Financial and Pioneer Solutions , you can compare the effects of market volatilities on John Hancock and Pioneer Solutions 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 Pioneer Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Pioneer Solutions.

Diversification Opportunities for John Hancock and Pioneer Solutions

0.52

Correlation Coefficient

John Hancock  Pioneer Solutions

Very weak diversification

The 3 months correlation between John and Pioneer is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Pioneer Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Solutions 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 Financial are associated (or correlated) with Pioneer Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Solutions has no effect on the direction of John Hancock i.e., John Hancock and Pioneer Solutions go up and down completely randomly.

Pair Corralation between John Hancock and Pioneer Solutions

Considering the 90-day investment horizon John Hancock Financial is expected to under-perform the Pioneer Solutions. In addition to that, John Hancock is 3.6 times more volatile than Pioneer Solutions . It trades about -0.36 of its total potential returns per unit of risk. Pioneer Solutions is currently generating about 0.2 per unit of volatility. If you would invest  1,020  in Pioneer Solutions on December 5, 2024 and sell it today you would earn a total of  14.00  from holding Pioneer Solutions or generate 1.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

John Hancock Financial  vs.  Pioneer Solutions

John Hancock Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Hancock Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest conflicting performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pioneer Solutions

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Solutions are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pioneer Solutions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Pioneer Solutions

The main advantage of trading using opposite John Hancock and Pioneer Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Pioneer Solutions 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 Pioneer Solutions will offset losses from the drop in Pioneer Solutions' long position.

The idea behind John Hancock Financial and Pioneer Solutions 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.