Correlation Between John Hancock and Nuveen Dynamic
Can any of the company-specific risk be diversified away by investing in both John Hancock and Nuveen Dynamic 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 Nuveen Dynamic 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 Nuveen Dynamic Municipal, you can compare the effects of market volatilities on John Hancock and Nuveen Dynamic 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 Nuveen Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Nuveen Dynamic.
Diversification Opportunities for John Hancock and Nuveen Dynamic
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Nuveen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Income and Nuveen Dynamic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dynamic Municipal 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 Nuveen Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dynamic Municipal has no effect on the direction of John Hancock i.e., John Hancock and Nuveen Dynamic go up and down completely randomly.
Pair Corralation between John Hancock and Nuveen Dynamic
Considering the 90-day investment horizon John Hancock is expected to generate 1.77 times less return on investment than Nuveen Dynamic. But when comparing it to its historical volatility, John Hancock Income is 1.32 times less risky than Nuveen Dynamic. It trades about 0.08 of its potential returns per unit of risk. Nuveen Dynamic Municipal is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Nuveen Dynamic Municipal on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Nuveen Dynamic Municipal or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Income vs. Nuveen Dynamic Municipal
Performance |
| Timeline |
| John Hancock Income |
| Nuveen Dynamic Municipal |
John Hancock and Nuveen Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Nuveen Dynamic
The main advantage of trading using opposite John Hancock and Nuveen Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Nuveen Dynamic 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 Nuveen Dynamic will offset losses from the drop in Nuveen Dynamic'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 |
| Nuveen Dynamic vs. Blackrock Muni Intermediate | Nuveen Dynamic vs. Blackrock Muniyield Quality | Nuveen Dynamic vs. DWS Municipal Income | Nuveen Dynamic vs. Blackrock Muniyield Quality |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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