Correlation Between John Hancock and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both John Hancock and Mainstay Large 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 Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Investment and Mainstay Large Cap, you can compare the effects of market volatilities on John Hancock and Mainstay Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Mainstay Large.
Diversification Opportunities for John Hancock and Mainstay Large
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between John and Mainstay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Investment and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap 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 Investment are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of John Hancock i.e., John Hancock and Mainstay Large go up and down completely randomly.
Pair Corralation between John Hancock and Mainstay Large
Assuming the 90 days horizon John Hancock is expected to generate 1.6 times less return on investment than Mainstay Large. But when comparing it to its historical volatility, John Hancock Investment is 1.28 times less risky than Mainstay Large. It trades about 0.09 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 481.00 in Mainstay Large Cap on September 3, 2024 and sell it today you would earn a total of 172.00 from holding Mainstay Large Cap or generate 35.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Investment vs. Mainstay Large Cap
Performance |
| Timeline |
| John Hancock Investment |
| Mainstay Large Cap |
John Hancock and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Mainstay Large
The main advantage of trading using opposite John Hancock and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Mainstay Large 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 Large will offset losses from the drop in Mainstay Large's long position.| John Hancock vs. Calamos Dynamic Convertible | John Hancock vs. Limited Term Tax | John Hancock vs. Touchstone Premium Yield | John Hancock vs. Versatile Bond Portfolio |
| Mainstay Large vs. Goldman Sachs Clean | Mainstay Large vs. International Investors Gold | Mainstay Large vs. Franklin Gold Precious | Mainstay Large vs. James Balanced Golden |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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