Correlation Between John Hancock and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both John Hancock and Invesco Trust 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 Invesco Trust 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 Invesco Trust For, you can compare the effects of market volatilities on John Hancock and Invesco Trust 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 Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Invesco Trust.
Diversification Opportunities for John Hancock and Invesco Trust
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Invesco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of John Hancock i.e., John Hancock and Invesco Trust go up and down completely randomly.
Pair Corralation between John Hancock and Invesco Trust
Considering the 90-day investment horizon John Hancock Income is expected to generate 0.68 times more return on investment than Invesco Trust. However, John Hancock Income is 1.46 times less risky than Invesco Trust. It trades about 0.03 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.0 per unit of risk. If you would invest 1,134 in John Hancock Income on December 1, 2024 and sell it today you would earn a total of 8.00 from holding John Hancock Income or generate 0.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
John Hancock Income vs. Invesco Trust For
Performance |
Timeline |
John Hancock Income |
Invesco Trust For |
John Hancock and Invesco Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Hancock and Invesco Trust
The main advantage of trading using opposite John Hancock and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Invesco Trust 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 Invesco Trust will offset losses from the drop in Invesco Trust's long position.John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
Invesco Trust vs. Invesco Municipal Income | Invesco Trust vs. DWS Municipal Income | Invesco Trust vs. MFS Municipal Income | Invesco Trust vs. MFS High Income |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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