Correlation Between American Funds and Jhancock Real
Can any of the company-specific risk be diversified away by investing in both American Funds and Jhancock Real 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 Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Jhancock Real Estate, you can compare the effects of market volatilities on American Funds and Jhancock Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jhancock Real.
Diversification Opportunities for American Funds and Jhancock Real
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Jhancock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Jhancock Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Real Estate 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 2050 are associated (or correlated) with Jhancock Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Real Estate has no effect on the direction of American Funds i.e., American Funds and Jhancock Real go up and down completely randomly.
Pair Corralation between American Funds and Jhancock Real
Assuming the 90 days horizon American Funds 2050 is expected to generate 0.76 times more return on investment than Jhancock Real. However, American Funds 2050 is 1.32 times less risky than Jhancock Real. It trades about 0.0 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about -0.01 per unit of risk. If you would invest 2,075 in American Funds 2050 on November 27, 2024 and sell it today you would earn a total of 0.00 from holding American Funds 2050 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2050 vs. Jhancock Real Estate
Performance |
| Timeline |
| American Funds 2050 |
| Jhancock Real Estate |
American Funds and Jhancock Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jhancock Real
The main advantage of trading using opposite American Funds and Jhancock Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jhancock Real 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 Real will offset losses from the drop in Jhancock Real's long position.| American Funds vs. Barings Global Floating | American Funds vs. Morningstar Global Income | American Funds vs. Ab Global Bond | American Funds vs. Legg Mason Bw |
| Jhancock Real vs. Transam Short Term Bond | Jhancock Real vs. Ashmore Emerging Markets | Jhancock Real vs. T Rowe Price | Jhancock Real vs. Touchstone Ultra Short |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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