Correlation Between American Funds and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both American Funds 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 Funds 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 Funds 2045 and Jhancock Diversified Macro, you can compare the effects of market volatilities on American Funds 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 Funds with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jhancock Diversified.
Diversification Opportunities for American Funds and Jhancock Diversified
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Jhancock is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2045 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 Funds 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 Funds 2045 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 Funds i.e., American Funds and Jhancock Diversified go up and down completely randomly.
Pair Corralation between American Funds and Jhancock Diversified
Assuming the 90 days horizon American Funds 2045 is expected to generate 1.12 times more return on investment than Jhancock Diversified. However, American Funds is 1.12 times more volatile than Jhancock Diversified Macro. It trades about 0.25 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.1 per unit of risk. If you would invest 2,093 in American Funds 2045 on September 1, 2024 and sell it today you would earn a total of 65.00 from holding American Funds 2045 or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2045 vs. Jhancock Diversified Macro
Performance |
| Timeline |
| American Funds 2045 |
| Jhancock Diversified |
American Funds and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jhancock Diversified
The main advantage of trading using opposite American Funds and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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 Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Jhancock Diversified vs. Ab Small Cap | Jhancock Diversified vs. Baird Smallmid Cap | Jhancock Diversified vs. Champlain Small | Jhancock Diversified vs. Small Midcap Dividend Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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