Correlation Between John Hancock and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both John Hancock and Pace 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 Pace Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Variable and Pace Municipal Fixed, you can compare the effects of market volatilities on John Hancock and Pace 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 Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Pace Municipal.
Diversification Opportunities for John Hancock and Pace Municipal
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Pace is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Variable and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed 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 Variable are associated (or correlated) with Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of John Hancock i.e., John Hancock and Pace Municipal go up and down completely randomly.
Pair Corralation between John Hancock and Pace Municipal
Assuming the 90 days horizon John Hancock Variable is expected to generate 6.31 times more return on investment than Pace Municipal. However, John Hancock is 6.31 times more volatile than Pace Municipal Fixed. It trades about 0.04 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.07 per unit of risk. If you would invest 1,808 in John Hancock Variable on September 1, 2024 and sell it today you would earn a total of 418.00 from holding John Hancock Variable or generate 23.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Variable vs. Pace Municipal Fixed
Performance |
| Timeline |
| John Hancock Variable |
| Pace Municipal Fixed |
John Hancock and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Pace Municipal
The main advantage of trading using opposite John Hancock and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Pace 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| John Hancock vs. Pace Municipal Fixed | John Hancock vs. T Rowe Price | John Hancock vs. Old Westbury Municipal | John Hancock vs. T Rowe Price |
| Pace Municipal vs. Lifestyle Ii Moderate | Pace Municipal vs. Target Retirement 2040 | Pace Municipal vs. Dimensional Retirement Income | Pace Municipal vs. Moderately Aggressive Balanced |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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