Correlation Between John Hancock and Morningstar Municipal
Can any of the company-specific risk be diversified away by investing in both John Hancock and Morningstar Municipal 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 Morningstar Municipal 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 Morningstar Municipal Bond, you can compare the effects of market volatilities on John Hancock and Morningstar Municipal 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 Morningstar Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Morningstar Municipal.
Diversification Opportunities for John Hancock and Morningstar Municipal
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between John and Morningstar is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Financial and Morningstar Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Municipal 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 Morningstar Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Municipal has no effect on the direction of John Hancock i.e., John Hancock and Morningstar Municipal go up and down completely randomly.
Pair Corralation between John Hancock and Morningstar Municipal
Considering the 90-day investment horizon John Hancock Financial is expected to generate 9.84 times more return on investment than Morningstar Municipal. However, John Hancock is 9.84 times more volatile than Morningstar Municipal Bond. It trades about 0.1 of its potential returns per unit of risk. Morningstar Municipal Bond is currently generating about 0.09 per unit of risk. If you would invest 2,099 in John Hancock Financial on August 29, 2024 and sell it today you would earn a total of 1,828 from holding John Hancock Financial or generate 87.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Financial vs. Morningstar Municipal Bond
Performance |
| Timeline |
| John Hancock Financial |
| Morningstar Municipal |
John Hancock and Morningstar Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Morningstar Municipal
The main advantage of trading using opposite John Hancock and Morningstar Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Morningstar Municipal 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 Morningstar Municipal will offset losses from the drop in Morningstar Municipal's long position.| John Hancock vs. MFS High Income | John Hancock vs. MFS High Yield | John Hancock vs. Blackrock Muniholdings Quality | John Hancock vs. MFS Government Markets |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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