Correlation Between Nuveen California and John Hancock
Can any of the company-specific risk be diversified away by investing in both Nuveen California 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 Nuveen California and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen California Select and John Hancock Preferred, you can compare the effects of market volatilities on Nuveen California 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 Nuveen California with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and John Hancock.
Diversification Opportunities for Nuveen California and John Hancock
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and John is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred and Nuveen California 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 Nuveen California Select 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 Preferred has no effect on the direction of Nuveen California i.e., Nuveen California and John Hancock go up and down completely randomly.
Pair Corralation between Nuveen California and John Hancock
Considering the 90-day investment horizon Nuveen California Select is expected to under-perform the John Hancock. But the stock apears to be less risky and, when comparing its historical volatility, Nuveen California Select is 1.42 times less risky than John Hancock. The stock trades about -0.04 of its potential returns per unit of risk. The John Hancock Preferred is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,567 in John Hancock Preferred on August 30, 2024 and sell it today you would lose (7.00) from holding John Hancock Preferred or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nuveen California Select vs. John Hancock Preferred
Performance |
| Timeline |
| Nuveen California Select |
| John Hancock Preferred |
Nuveen California and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and John Hancock
The main advantage of trading using opposite Nuveen California and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California 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.| Nuveen California vs. Eaton Vance National | Nuveen California vs. Invesco High Income | Nuveen California vs. Blackrock Muniholdings Ny | Nuveen California vs. MFS Investment Grade |
| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. Flaherty Crumrine Preferred | John Hancock vs. John Hancock Tax |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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