Correlation Between Allspring Income and John Hancock

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

By analyzing existing cross correlation between Allspring Income Opportunities and John Hancock Preferred, you can compare the effects of market volatilities on Allspring Income 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 Allspring Income with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allspring Income and John Hancock.

Diversification Opportunities for Allspring Income and John Hancock

0.31

Correlation Coefficient

Allspring Income  John Hancock

Weak diversification

The 3 months correlation between Allspring and John is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Allspring Income Opportunities 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 Allspring Income 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 Allspring Income Opportunities 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 Allspring Income i.e., Allspring Income and John Hancock go up and down completely randomly.

Pair Corralation between Allspring Income and John Hancock

Considering the 90-day investment horizon Allspring Income Opportunities is expected to generate 0.69 times more return on investment than John Hancock. However, Allspring Income Opportunities is 1.45 times less risky than John Hancock. It trades about 0.03 of its potential returns per unit of risk. John Hancock Preferred is currently generating about -0.13 per unit of risk. If you would invest  693.00  in Allspring Income Opportunities on September 13, 2024 and sell it today you would earn a total of  7.00  from holding Allspring Income Opportunities or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Allspring Income Opportunities  vs.  John Hancock Preferred

Allspring Income Opp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allspring Income Opportunities are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Allspring Income is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

John Hancock Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, John Hancock is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Allspring Income and John Hancock

The main advantage of trading using opposite Allspring Income and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allspring Income 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.

The idea behind Allspring Income Opportunities and John Hancock Preferred 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.