Correlation Between American High-income and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both American High-income and Jhancock Diversified 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 American High-income and Jhancock Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income Municipal and Jhancock Diversified Macro, you can compare the effects of market volatilities on American High-income and Jhancock Diversified 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 American High-income with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High-income and Jhancock Diversified.
Diversification Opportunities for American High-income and Jhancock Diversified
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Jhancock is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding American High Income Municipal and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and American High-income 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 American High Income Municipal are associated (or correlated) with Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of American High-income i.e., American High-income and Jhancock Diversified go up and down completely randomly.
Pair Corralation between American High-income and Jhancock Diversified
Assuming the 90 days horizon American High Income Municipal is expected to under-perform the Jhancock Diversified. But the mutual fund apears to be less risky and, when comparing its historical volatility, American High Income Municipal is 1.39 times less risky than Jhancock Diversified. The mutual fund trades about -0.37 of its potential returns per unit of risk. The Jhancock Diversified Macro is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 911.00 in Jhancock Diversified Macro on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Jhancock Diversified Macro or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American High Income Municipal vs. Jhancock Diversified Macro
Performance |
| Timeline |
| American High Income |
| Jhancock Diversified |
American High-income and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High-income and Jhancock Diversified
The main advantage of trading using opposite American High-income and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High-income position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.| American High-income vs. T Rowe Price | American High-income vs. Nasdaq 100 Profund Nasdaq 100 | American High-income vs. Commodities Strategy Fund | American High-income vs. Predex Funds |
| Jhancock Diversified vs. Rbb Fund | Jhancock Diversified vs. Locorr Market Trend | Jhancock Diversified vs. Nasdaq 100 Profund Nasdaq 100 | Jhancock Diversified vs. T Rowe Price |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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