Correlation Between Mfs Value and John Hancock
Can any of the company-specific risk be diversified away by investing in both Mfs Value 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 Mfs Value and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and John Hancock Disciplined, you can compare the effects of market volatilities on Mfs Value 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 Mfs Value with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and John Hancock.
Diversification Opportunities for Mfs Value and John Hancock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and JOHN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined and Mfs Value 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 Mfs Value Fund 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 Disciplined has no effect on the direction of Mfs Value i.e., Mfs Value and John Hancock go up and down completely randomly.
Pair Corralation between Mfs Value and John Hancock
Assuming the 90 days horizon Mfs Value is expected to generate 1.23 times less return on investment than John Hancock. But when comparing it to its historical volatility, Mfs Value Fund is 1.24 times less risky than John Hancock. It trades about 0.12 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,217 in John Hancock Disciplined on August 25, 2024 and sell it today you would earn a total of 501.00 from holding John Hancock Disciplined or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. John Hancock Disciplined
Performance |
| Timeline |
| Mfs Value Fund |
| John Hancock Disciplined |
Mfs Value and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and John Hancock
The main advantage of trading using opposite Mfs Value and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value 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.| Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor |
| John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced | John Hancock vs. Multimanager Lifestyle Servative | John Hancock vs. Regional Bank Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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