Correlation Between John Hancock and Mfs International
Can any of the company-specific risk be diversified away by investing in both John Hancock and Mfs International 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 Mfs International 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 Mfs International Diversification, you can compare the effects of market volatilities on John Hancock and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Mfs International.
Diversification Opportunities for John Hancock and Mfs International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Mfs is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International has no effect on the direction of John Hancock i.e., John Hancock and Mfs International go up and down completely randomly.
Pair Corralation between John Hancock and Mfs International
Assuming the 90 days horizon John Hancock is expected to generate 1.93 times less return on investment than Mfs International. But when comparing it to its historical volatility, John Hancock Bond is 1.8 times less risky than Mfs International. It trades about 0.04 of its potential returns per unit of risk. Mfs International Diversification is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,939 in Mfs International Diversification on August 29, 2024 and sell it today you would earn a total of 304.00 from holding Mfs International Diversification or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Bond vs. Mfs International Diversificat
Performance |
| Timeline |
| John Hancock Bond |
| Mfs International |
John Hancock and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Mfs International
The main advantage of trading using opposite John Hancock and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.| John Hancock vs. Rationalpier 88 Convertible | John Hancock vs. Absolute Convertible Arbitrage | John Hancock vs. Allianzgi Convertible Income | John Hancock vs. Gabelli Convertible And |
| Mfs International vs. Hartford Moderate Allocation | Mfs International vs. T Rowe Price | Mfs International vs. Dodge Cox Stock | Mfs International vs. Goldman Sachs Large |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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