Correlation Between John Hancock and Pgim High

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

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

Diversification Opportunities for John Hancock and Pgim High

0.56

Correlation Coefficient

John Hancock  Pgim High

Very weak diversification

The 3 months correlation between John and Pgim is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Disciplined and Pgim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim High Yield 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 Disciplined are associated (or correlated) with Pgim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim High Yield has no effect on the direction of John Hancock i.e., John Hancock and Pgim High go up and down completely randomly.

Pair Corralation between John Hancock and Pgim High

Assuming the 90 days horizon John Hancock Disciplined is expected to generate 4.88 times more return on investment than Pgim High. However, John Hancock is 4.88 times more volatile than Pgim High Yield. It trades about 0.14 of its potential returns per unit of risk. Pgim High Yield is currently generating about 0.12 per unit of risk. If you would invest  2,955  in John Hancock Disciplined on September 12, 2024 and sell it today you would earn a total of  212.00  from holding John Hancock Disciplined or generate 7.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

John Hancock Disciplined  vs.  Pgim High Yield

John Hancock Disciplined

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Disciplined are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, John Hancock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pgim High Yield

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim High Yield are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Pgim High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Pgim High

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

The idea behind John Hancock Disciplined and Pgim High Yield 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..