Correlation Between Invesco SP and John Hancock
Can any of the company-specific risk be diversified away by investing in both Invesco SP 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 Invesco SP and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP 500 and John Hancock Multifactor, you can compare the effects of market volatilities on Invesco SP 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 Invesco SP with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and John Hancock.
Diversification Opportunities for Invesco SP and John Hancock
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Invesco and John is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and John Hancock Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Multifactor and Invesco SP 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 Invesco SP 500 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 Multifactor has no effect on the direction of Invesco SP i.e., Invesco SP and John Hancock go up and down completely randomly.
Pair Corralation between Invesco SP and John Hancock
Given the investment horizon of 90 days Invesco SP 500 is expected to generate 1.02 times more return on investment than John Hancock. However, Invesco SP is 1.02 times more volatile than John Hancock Multifactor. It trades about 0.12 of its potential returns per unit of risk. John Hancock Multifactor is currently generating about 0.12 per unit of risk. If you would invest 5,099 in Invesco SP 500 on January 24, 2024 and sell it today you would earn a total of 765.00 from holding Invesco SP 500 or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. John Hancock Multifactor
Performance |
| Timeline |
| Invesco SP 500 |
| John Hancock Multifactor |
Invesco SP and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and John Hancock
The main advantage of trading using opposite Invesco SP and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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.| Invesco SP vs. iShares MSCI USA | Invesco SP vs. Invesco SP 500 | Invesco SP vs. Invesco SP 500 | Invesco SP vs. iShares MSCI USA |
| John Hancock vs. John Hancock Multifactor | John Hancock vs. JPMorgan Diversified Return | John Hancock vs. iShares Equity Factor | John Hancock vs. John Hancock Multifactor |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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