Correlation Between John Hancock and California High-yield
Can any of the company-specific risk be diversified away by investing in both John Hancock and California High-yield 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 California High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Var and California High Yield Municipal, you can compare the effects of market volatilities on John Hancock and California High-yield 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 California High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and California High-yield.
Diversification Opportunities for John Hancock and California High-yield
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and California is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Var and California High Yield Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California 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 Var are associated (or correlated) with California High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California High Yield has no effect on the direction of John Hancock i.e., John Hancock and California High-yield go up and down completely randomly.
Pair Corralation between John Hancock and California High-yield
Assuming the 90 days horizon John Hancock Var is expected to generate 3.14 times more return on investment than California High-yield. However, John Hancock is 3.14 times more volatile than California High Yield Municipal. It trades about 0.27 of its potential returns per unit of risk. California High Yield Municipal is currently generating about -0.09 per unit of risk. If you would invest 2,127 in John Hancock Var on October 21, 2024 and sell it today you would earn a total of 80.00 from holding John Hancock Var or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Var vs. California High Yield Municipa
Performance |
| Timeline |
| John Hancock Var |
| California High Yield |
John Hancock and California High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and California High-yield
The main advantage of trading using opposite John Hancock and California High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, California High-yield 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 California High-yield will offset losses from the drop in California High-yield's long position.| John Hancock vs. Highland Longshort Healthcare | John Hancock vs. Hartford Healthcare Hls | John Hancock vs. Invesco Global Health | John Hancock vs. Lord Abbett Health |
| California High-yield vs. Prudential High Yield | California High-yield vs. Voya High Yield | California High-yield vs. Msift High Yield | California High-yield vs. Dunham High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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