Correlation Between Blackrock Muniholdings and John Hancock
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings 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 Blackrock Muniholdings and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Quality and John Hancock Income, you can compare the effects of market volatilities on Blackrock Muniholdings 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 Blackrock Muniholdings with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and John Hancock.
Diversification Opportunities for Blackrock Muniholdings and John Hancock
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blackrock and John is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Blackrock Muniholdings 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 Blackrock Muniholdings Quality 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 Income has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and John Hancock go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and John Hancock
Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to generate 1.02 times more return on investment than John Hancock. However, Blackrock Muniholdings is 1.02 times more volatile than John Hancock Income. It trades about 0.44 of its potential returns per unit of risk. John Hancock Income is currently generating about -0.03 per unit of risk. If you would invest 1,021 in Blackrock Muniholdings Quality on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Blackrock Muniholdings Quality or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Quality vs. John Hancock Income
Performance |
| Timeline |
| Blackrock Muniholdings |
| John Hancock Income |
Blackrock Muniholdings and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and John Hancock
The main advantage of trading using opposite Blackrock Muniholdings and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings 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.| Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. MFS High Yield | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. John Hancock Income |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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