Correlation Between Mfs Growth and John Hancock

Can any of the company-specific risk be diversified away by investing in both Mfs Growth 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 Growth 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 Growth Fund and John Hancock Bond, you can compare the effects of market volatilities on Mfs Growth 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 Growth with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and John Hancock.

Diversification Opportunities for Mfs Growth and John Hancock

0.33

Correlation Coefficient

Mfs Growth  John Hancock

Weak diversification

The 3 months correlation between Mfs and John is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond and Mfs Growth 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 Growth 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 Bond has no effect on the direction of Mfs Growth i.e., Mfs Growth and John Hancock go up and down completely randomly.

Pair Corralation between Mfs Growth and John Hancock

Assuming the 90 days horizon Mfs Growth Fund is expected to under-perform the John Hancock. In addition to that, Mfs Growth is 3.52 times more volatile than John Hancock Bond. It trades about -0.25 of its total potential returns per unit of risk. John Hancock Bond is currently generating about 0.25 per unit of volatility. If you would invest  1,335  in John Hancock Bond on December 5, 2024 and sell it today you would earn a total of  23.00  from holding John Hancock Bond or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mfs Growth Fund  vs.  John Hancock Bond

Mfs Growth Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

John Hancock Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Bond are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, John Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Growth and John Hancock

The main advantage of trading using opposite Mfs Growth and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth 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.

The idea behind Mfs Growth Fund and John Hancock Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.