Correlation Between John Hancock and Mainstay Definedterm
Can any of the company-specific risk be diversified away by investing in both John Hancock and Mainstay Definedterm 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 Mainstay Definedterm 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 Mainstay Definedterm Muncipal, you can compare the effects of market volatilities on John Hancock and Mainstay Definedterm 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 Mainstay Definedterm. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Mainstay Definedterm.
Diversification Opportunities for John Hancock and Mainstay Definedterm
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between John and Mainstay is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Mainstay Definedterm Muncipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Definedterm 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 Mainstay Definedterm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Definedterm has no effect on the direction of John Hancock i.e., John Hancock and Mainstay Definedterm go up and down completely randomly.
Pair Corralation between John Hancock and Mainstay Definedterm
Considering the 90-day investment horizon John Hancock Income is expected to generate 0.8 times more return on investment than Mainstay Definedterm. However, John Hancock Income is 1.25 times less risky than Mainstay Definedterm. It trades about -0.06 of its potential returns per unit of risk. Mainstay Definedterm Muncipal is currently generating about -0.14 per unit of risk. If you would invest 1,169 in John Hancock Income on August 29, 2024 and sell it today you would lose (19.00) from holding John Hancock Income or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Income vs. Mainstay Definedterm Muncipal
Performance |
| Timeline |
| John Hancock Income |
| Mainstay Definedterm |
John Hancock and Mainstay Definedterm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Mainstay Definedterm
The main advantage of trading using opposite John Hancock and Mainstay Definedterm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Mainstay Definedterm 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 Mainstay Definedterm will offset losses from the drop in Mainstay Definedterm'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 |
| Mainstay Definedterm vs. Blackrock Muniholdings Closed | Mainstay Definedterm vs. DTF Tax Free | Mainstay Definedterm vs. John Hancock Income | Mainstay Definedterm vs. MFS Investment Grade |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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