Correlation Between John Hancock and MFS Investment
Can any of the company-specific risk be diversified away by investing in both John Hancock and MFS Investment 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 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Income and MFS Investment Grade, you can compare the effects of market volatilities on John Hancock and MFS Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and MFS Investment.
Diversification Opportunities for John Hancock and MFS Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and MFS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 Income are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of John Hancock i.e., John Hancock and MFS Investment go up and down completely randomly.
Pair Corralation between John Hancock and MFS Investment
Considering the 90-day investment horizon John Hancock is expected to generate 1.18 times less return on investment than MFS Investment. In addition to that, John Hancock is 1.24 times more volatile than MFS Investment Grade. It trades about 0.1 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.15 per unit of volatility. If you would invest 689.00 in MFS Investment Grade on August 24, 2024 and sell it today you would earn a total of 127.00 from holding MFS Investment Grade or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
John Hancock Income vs. MFS Investment Grade
Performance |
| Timeline |
| John Hancock Income |
| MFS Investment Grade |
John Hancock and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and MFS Investment
The main advantage of trading using opposite John Hancock and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, MFS Investment 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 Investment will offset losses from the drop in MFS Investment's long position.| John Hancock vs. MFS High Income | John Hancock vs. MFS Investment Grade | John Hancock vs. Blackrock Muniholdings Closed | John Hancock vs. Eaton Vance National |
| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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