Correlation Between John Hancock and Mainstay High
Can any of the company-specific risk be diversified away by investing in both John Hancock and Mainstay High 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 Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Financial and Mainstay High Yield, you can compare the effects of market volatilities on John Hancock and Mainstay High 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 Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Mainstay High.
Diversification Opportunities for John Hancock and Mainstay High
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Mainstay is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield 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 Financial are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of John Hancock i.e., John Hancock and Mainstay High go up and down completely randomly.
Pair Corralation between John Hancock and Mainstay High
Considering the 90-day investment horizon John Hancock Financial is expected to generate 11.38 times more return on investment than Mainstay High. However, John Hancock is 11.38 times more volatile than Mainstay High Yield. It trades about 0.33 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.15 per unit of risk. If you would invest 3,409 in John Hancock Financial on August 29, 2024 and sell it today you would earn a total of 518.00 from holding John Hancock Financial or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
John Hancock Financial vs. Mainstay High Yield
Performance |
| Timeline |
| John Hancock Financial |
| Mainstay High Yield |
John Hancock and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Mainstay High
The main advantage of trading using opposite John Hancock and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Mainstay High 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 Mainstay High will offset losses from the drop in Mainstay High's long position.| John Hancock vs. Gabelli Global Small | John Hancock vs. MFS Investment Grade | John Hancock vs. Eaton Vance National | John Hancock vs. GAMCO Natural Resources |
| Mainstay High vs. Transamerica Intermediate Muni | Mainstay High vs. Nuveen Massachusetts Municipal | Mainstay High vs. Gamco Global Telecommunications | Mainstay High vs. Federated Government Ultrashort |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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