Correlation Between John Hancock and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both John Hancock and Massmutual Select 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 Massmutual Select 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 Massmutual Select T, you can compare the effects of market volatilities on John Hancock and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Massmutual Select.
Diversification Opportunities for John Hancock and Massmutual Select
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Massmutual is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of John Hancock i.e., John Hancock and Massmutual Select go up and down completely randomly.
Pair Corralation between John Hancock and Massmutual Select
Considering the 90-day investment horizon John Hancock Financial is expected to generate 2.18 times more return on investment than Massmutual Select. However, John Hancock is 2.18 times more volatile than Massmutual Select T. It trades about 0.15 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.09 per unit of risk. If you would invest 2,717 in John Hancock Financial on September 3, 2024 and sell it today you would earn a total of 1,223 from holding John Hancock Financial or generate 45.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Massmutual Select T
Performance |
| Timeline |
| John Hancock Financial |
| Massmutual Select |
John Hancock and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Massmutual Select
The main advantage of trading using opposite John Hancock and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
| Massmutual Select vs. Fidelity Freedom Blend | Massmutual Select vs. Fidelity Freedom Blend | Massmutual Select vs. Fidelity Freedom Blend | Massmutual Select vs. Fidelity Freedom Blend |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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