Correlation Between John Hancock and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both John Hancock and Federated Mdt 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 Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Hancock Municipal and Federated Mdt All, you can compare the effects of market volatilities on John Hancock and Federated Mdt 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 Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Federated Mdt.
Diversification Opportunities for John Hancock and Federated Mdt
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Federated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Municipal and Federated Mdt All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt All 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 Municipal are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt All has no effect on the direction of John Hancock i.e., John Hancock and Federated Mdt go up and down completely randomly.
Pair Corralation between John Hancock and Federated Mdt
Assuming the 90 days horizon John Hancock is expected to generate 4.1 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, John Hancock Municipal is 5.79 times less risky than Federated Mdt. It trades about 0.27 of its potential returns per unit of risk. Federated Mdt All is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,758 in Federated Mdt All on June 8, 2025 and sell it today you would earn a total of 377.00 from holding Federated Mdt All or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Hancock Municipal vs. Federated Mdt All
Performance |
| Timeline |
| John Hancock Municipal |
| Federated Mdt All |
John Hancock and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Federated Mdt
The main advantage of trading using opposite John Hancock and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Hancock position performs unexpectedly, Federated Mdt 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 Federated Mdt will offset losses from the drop in Federated Mdt's long position.| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Balanced | John Hancock vs. Multimanager Lifestyle Aggressive |
| Federated Mdt vs. John Hancock Municipal | Federated Mdt vs. Prudential Short Duration | Federated Mdt vs. Westwood Short Duration | Federated Mdt vs. Lord Abbett Short |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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