Correlation Between John Hancock and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both John Hancock and Metropolitan West 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 Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Bond and Metropolitan West Total, you can compare the effects of market volatilities on John Hancock and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Metropolitan West.
Diversification Opportunities for John Hancock and Metropolitan West
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Metropolitan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total 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 Bond are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of John Hancock i.e., John Hancock and Metropolitan West go up and down completely randomly.
Pair Corralation between John Hancock and Metropolitan West
Assuming the 90 days horizon John Hancock is expected to generate 1.01 times less return on investment than Metropolitan West. But when comparing it to its historical volatility, John Hancock Bond is 1.15 times less risky than Metropolitan West. It trades about 0.14 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 903.00 in Metropolitan West Total on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Metropolitan West Total or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
John Hancock Bond vs. Metropolitan West Total
Performance |
| Timeline |
| John Hancock Bond |
| Metropolitan West Total |
John Hancock and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Metropolitan West
The main advantage of trading using opposite John Hancock and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| John Hancock vs. John Hancock International | John Hancock vs. Mfs International Diversification | John Hancock vs. Mfs Growth Fund | John Hancock vs. Invesco Diversified Dividend |
| Metropolitan West vs. Siit High Yield | Metropolitan West vs. Gmo High Yield | Metropolitan West vs. Virtus High Yield | Metropolitan West vs. Alpine 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |