Correlation Between John Hancock and Sierra Tactical
Can any of the company-specific risk be diversified away by investing in both John Hancock and Sierra Tactical 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 Sierra Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Government and Sierra Tactical Municipal, you can compare the effects of market volatilities on John Hancock and Sierra Tactical 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 Sierra Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Sierra Tactical.
Diversification Opportunities for John Hancock and Sierra Tactical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Sierra is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Government and Sierra Tactical Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Tactical 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 Government are associated (or correlated) with Sierra Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Tactical Municipal has no effect on the direction of John Hancock i.e., John Hancock and Sierra Tactical go up and down completely randomly.
Pair Corralation between John Hancock and Sierra Tactical
Assuming the 90 days horizon John Hancock is expected to generate 1.68 times less return on investment than Sierra Tactical. In addition to that, John Hancock is 1.07 times more volatile than Sierra Tactical Municipal. It trades about 0.08 of its total potential returns per unit of risk. Sierra Tactical Municipal is currently generating about 0.14 per unit of volatility. If you would invest 2,553 in Sierra Tactical Municipal on August 29, 2024 and sell it today you would earn a total of 28.00 from holding Sierra Tactical Municipal or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Government vs. Sierra Tactical Municipal
Performance |
| Timeline |
| John Hancock Government |
| Sierra Tactical Municipal |
John Hancock and Sierra Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Sierra Tactical
The main advantage of trading using opposite John Hancock and Sierra Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Sierra Tactical 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 Sierra Tactical will offset losses from the drop in Sierra Tactical's long position.| John Hancock vs. Us Global Investors | John Hancock vs. T Rowe Price | John Hancock vs. Ab Global Bond | John Hancock vs. Barings Global Floating |
| Sierra Tactical vs. Baillie Gifford Health | Sierra Tactical vs. Blackrock Health Sciences | Sierra Tactical vs. Lord Abbett Health | Sierra Tactical vs. Health Care Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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