Correlation Between Mainstay Short and John Hancock
Can any of the company-specific risk be diversified away by investing in both Mainstay Short and John Hancock 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 Mainstay Short and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Short Duration and John Hancock Financial, you can compare the effects of market volatilities on Mainstay Short and John Hancock 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 Mainstay Short with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Short and John Hancock.
Diversification Opportunities for Mainstay Short and John Hancock
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and John is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Short Duration and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and Mainstay Short 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 Mainstay Short Duration are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Financial has no effect on the direction of Mainstay Short i.e., Mainstay Short and John Hancock go up and down completely randomly.
Pair Corralation between Mainstay Short and John Hancock
Assuming the 90 days horizon Mainstay Short is expected to generate 2.07 times less return on investment than John Hancock. But when comparing it to its historical volatility, Mainstay Short Duration is 14.01 times less risky than John Hancock. It trades about 0.19 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,083 in John Hancock Financial on October 19, 2024 and sell it today you would earn a total of 585.00 from holding John Hancock Financial or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Short Duration vs. John Hancock Financial
Performance |
| Timeline |
| Mainstay Short Duration |
| John Hancock Financial |
Mainstay Short and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Short and John Hancock
The main advantage of trading using opposite Mainstay Short and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Short position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Mainstay Short vs. Siit High Yield | Mainstay Short vs. Transamerica High Yield | Mainstay Short vs. Millerhoward High Income | Mainstay Short vs. Msift High Yield |
| John Hancock vs. Tekla Life Sciences | John Hancock vs. Tekla World Healthcare | John Hancock vs. Tekla Healthcare Opportunities | John Hancock vs. Royce Value Closed |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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