Correlation Between Allianzgi Convertible and John Hancock

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

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

Diversification Opportunities for Allianzgi Convertible and John Hancock

0.5

Correlation Coefficient

Allianzgi Convertible  John Hancock

Very weak diversification

The 3 months correlation between Allianzgi and John is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income 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 Allianzgi Convertible 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 Allianzgi Convertible Income 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 Allianzgi Convertible i.e., Allianzgi Convertible and John Hancock go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and John Hancock

Considering the 90-day investment horizon Allianzgi Convertible Income is expected to under-perform the John Hancock. In addition to that, Allianzgi Convertible is 1.2 times more volatile than John Hancock Preferred. It trades about -0.05 of its total potential returns per unit of risk. John Hancock Preferred is currently generating about 0.04 per unit of volatility. If you would invest  1,619  in John Hancock Preferred on December 28, 2024 and sell it today you would earn a total of  34.00  from holding John Hancock Preferred or generate 2.1% return on investment over 90 days.

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

Allianzgi Convertible Income  vs.  John Hancock Preferred

Allianzgi Convertible

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Convertible Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable fundamental indicators, Allianzgi Convertible is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

John Hancock Preferred

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Preferred are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, John Hancock is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Allianzgi Convertible and John Hancock

The main advantage of trading using opposite Allianzgi Convertible and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible 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 Allianzgi Convertible Income 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.