Correlation Between Eafe Fund and Jhancock Short
Can any of the company-specific risk be diversified away by investing in both Eafe Fund and Jhancock Short 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 Eafe Fund and Jhancock Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Eafe Fund and Jhancock Short Duration, you can compare the effects of market volatilities on Eafe Fund and Jhancock Short 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 Eafe Fund with a short position of Jhancock Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eafe Fund and Jhancock Short.
Diversification Opportunities for Eafe Fund and Jhancock Short
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eafe and Jhancock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Eafe Fund and Jhancock Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Short Duration and Eafe Fund 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 The Eafe Fund are associated (or correlated) with Jhancock Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Short Duration has no effect on the direction of Eafe Fund i.e., Eafe Fund and Jhancock Short go up and down completely randomly.
Pair Corralation between Eafe Fund and Jhancock Short
Assuming the 90 days horizon The Eafe Fund is expected to generate 8.16 times more return on investment than Jhancock Short. However, Eafe Fund is 8.16 times more volatile than Jhancock Short Duration. It trades about 0.06 of its potential returns per unit of risk. Jhancock Short Duration is currently generating about 0.17 per unit of risk. If you would invest 1,205 in The Eafe Fund on September 2, 2024 and sell it today you would earn a total of 191.00 from holding The Eafe Fund or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Eafe Fund vs. Jhancock Short Duration
Performance |
| Timeline |
| Eafe Fund |
| Jhancock Short Duration |
Eafe Fund and Jhancock Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eafe Fund and Jhancock Short
The main advantage of trading using opposite Eafe Fund and Jhancock Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eafe Fund position performs unexpectedly, Jhancock Short 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 Short will offset losses from the drop in Jhancock Short's long position.| Eafe Fund vs. The Eafe Pure | Eafe Fund vs. The Long Term | Eafe Fund vs. Baillie Gifford China | Eafe Fund vs. Baillie Gifford China |
| Jhancock Short vs. Goehring Rozencwajg Resources | Jhancock Short vs. Oil Gas Ultrasector | Jhancock Short vs. Franklin Natural Resources | Jhancock Short vs. Energy Services Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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