Correlation Between John Hancock and Pimco Realestaterealre

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

By analyzing existing cross correlation between John Hancock Government and Pimco Realestaterealreturn Strategy, you can compare the effects of market volatilities on John Hancock and Pimco Realestaterealre 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 Pimco Realestaterealre. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Pimco Realestaterealre.

Diversification Opportunities for John Hancock and Pimco Realestaterealre

0.51

Correlation Coefficient

John Hancock  Pimco Realestaterealre

Very weak diversification

The 3 months correlation between John and Pimco is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Pimco Realestaterealreturn Str in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Realestaterealre 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 Government are associated (or correlated) with Pimco Realestaterealre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Realestaterealre has no effect on the direction of John Hancock i.e., John Hancock and Pimco Realestaterealre go up and down completely randomly.

Pair Corralation between John Hancock and Pimco Realestaterealre

Assuming the 90 days horizon John Hancock is expected to generate 5.7 times less return on investment than Pimco Realestaterealre. But when comparing it to its historical volatility, John Hancock Government is 2.16 times less risky than Pimco Realestaterealre. It trades about 0.15 of its potential returns per unit of risk. Pimco Realestaterealreturn Strategy is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  2,578  in Pimco Realestaterealreturn Strategy on September 2, 2024 and sell it today you would earn a total of  175.00  from holding Pimco Realestaterealreturn Strategy or generate 6.79% return on investment over 90 days.

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

John Hancock Government  vs.  Pimco Realestaterealreturn Str

John Hancock Government

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Government has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pimco Realestaterealre

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Realestaterealreturn Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Realestaterealre is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with John Hancock and Pimco Realestaterealre

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

The idea behind John Hancock Government and Pimco Realestaterealreturn Strategy 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.