Correlation Between John Hancock and Mfs Institutional
Can any of the company-specific risk be diversified away by investing in both John Hancock and Mfs Institutional 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 Institutional 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 Institutional International, you can compare the effects of market volatilities on John Hancock and Mfs Institutional 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 Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Mfs Institutional.
Diversification Opportunities for John Hancock and Mfs Institutional
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Mfs is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Mfs Institutional Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Institutional 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 Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Institutional has no effect on the direction of John Hancock i.e., John Hancock and Mfs Institutional go up and down completely randomly.
Pair Corralation between John Hancock and Mfs Institutional
Assuming the 90 days horizon John Hancock is expected to generate 1.68 times less return on investment than Mfs Institutional. But when comparing it to its historical volatility, John Hancock Bond is 1.85 times less risky than Mfs Institutional. It trades about 0.05 of its potential returns per unit of risk. Mfs Institutional International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,098 in Mfs Institutional International on September 1, 2024 and sell it today you would earn a total of 411.00 from holding Mfs Institutional International or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
John Hancock Bond vs. Mfs Institutional Internationa
Performance |
| Timeline |
| John Hancock Bond |
| Mfs Institutional |
John Hancock and Mfs Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Mfs Institutional
The main advantage of trading using opposite John Hancock and Mfs Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Mfs Institutional 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 Institutional will offset losses from the drop in Mfs Institutional's long position.| John Hancock vs. Ep Emerging Markets | John Hancock vs. Growth Strategy Fund | John Hancock vs. Ashmore Emerging Markets | John Hancock vs. Origin Emerging Markets |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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