Correlation Between California High-yield and John Hancock
Can any of the company-specific risk be diversified away by investing in both California High-yield 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 California High-yield and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and John Hancock Strategic, you can compare the effects of market volatilities on California High-yield 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 California High-yield with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and John Hancock.
Diversification Opportunities for California High-yield and John Hancock
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between California and John is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and John Hancock Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Strategic and California High-yield 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 California High Yield Municipal 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 Strategic has no effect on the direction of California High-yield i.e., California High-yield and John Hancock go up and down completely randomly.
Pair Corralation between California High-yield and John Hancock
Assuming the 90 days horizon California High-yield is expected to generate 6.26 times less return on investment than John Hancock. But when comparing it to its historical volatility, California High Yield Municipal is 3.83 times less risky than John Hancock. It trades about 0.05 of its potential returns per unit of risk. John Hancock Strategic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,780 in John Hancock Strategic on October 22, 2024 and sell it today you would earn a total of 940.00 from holding John Hancock Strategic or generate 52.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. John Hancock Strategic
Performance |
| Timeline |
| California High Yield |
| John Hancock Strategic |
California High-yield and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and John Hancock
The main advantage of trading using opposite California High-yield and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield 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 California High Yield Municipal and John Hancock Strategic 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.
| John Hancock vs. Fidelity Advisor Energy | John Hancock vs. Transamerica Mlp Energy | John Hancock vs. Environment And Alternative | John Hancock vs. Vanguard Energy Index |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |