Correlation Between Brandes Global and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Brandes Global 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 Brandes Global and Jhancock Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes Global Equity and Jhancock Diversified Macro, you can compare the effects of market volatilities on Brandes Global 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 Brandes Global with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Global and Jhancock Diversified.
Diversification Opportunities for Brandes Global and Jhancock Diversified
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brandes and Jhancock is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Global Equity and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and Brandes Global 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 Brandes Global Equity 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 Brandes Global i.e., Brandes Global and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Brandes Global and Jhancock Diversified
Assuming the 90 days horizon Brandes Global Equity is expected to generate 1.6 times more return on investment than Jhancock Diversified. However, Brandes Global is 1.6 times more volatile than Jhancock Diversified Macro. It trades about 0.18 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.12 per unit of risk. If you would invest 3,023 in Brandes Global Equity on November 28, 2024 and sell it today you would earn a total of 75.00 from holding Brandes Global Equity or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes Global Equity vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Brandes Global Equity |
| Jhancock Diversified |
Brandes Global and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Global and Jhancock Diversified
The main advantage of trading using opposite Brandes Global and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Global 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.| Brandes Global vs. Lord Abbett Vertible | Brandes Global vs. Forum Funds | Brandes Global vs. Invesco Vertible Securities | Brandes Global vs. Calamos Vertible Fund |
| Jhancock Diversified vs. Ashmore Emerging Markets | Jhancock Diversified vs. Hartford Schroders Emerging | Jhancock Diversified vs. Pace International Emerging | Jhancock Diversified vs. Pnc Emerging Markets |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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