Correlation Between PIMCO Access and John Hancock

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

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

Diversification Opportunities for PIMCO Access and John Hancock

0.65

Correlation Coefficient

PIMCO Access  John Hancock

Poor diversification

The 3 months correlation between PIMCO and John is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Access Income and John Hancock Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Hedged and PIMCO Access 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 PIMCO Access 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 Hedged has no effect on the direction of PIMCO Access i.e., PIMCO Access and John Hancock go up and down completely randomly.

Pair Corralation between PIMCO Access and John Hancock

Given the investment horizon of 90 days PIMCO Access Income is expected to generate 1.66 times more return on investment than John Hancock. However, PIMCO Access is 1.66 times more volatile than John Hancock Hedged. It trades about 0.13 of its potential returns per unit of risk. John Hancock Hedged is currently generating about 0.09 per unit of risk. If you would invest  1,563  in PIMCO Access Income on September 4, 2024 and sell it today you would earn a total of  124.00  from holding PIMCO Access Income or generate 7.93% return on investment over 90 days.

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

PIMCO Access Income  vs.  John Hancock Hedged

PIMCO Access Income

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Access Income are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, PIMCO Access may actually be approaching a critical reversion point that can send shares even higher in January 2025.

John Hancock Hedged

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Hedged are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, John Hancock is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PIMCO Access and John Hancock

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

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.