Correlation Between Dodge International and Jhancock Real
Can any of the company-specific risk be diversified away by investing in both Dodge International 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 Dodge International and Jhancock Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Jhancock Real Estate, you can compare the effects of market volatilities on Dodge International 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 Dodge International with a short position of Jhancock Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge International and Jhancock Real.
Diversification Opportunities for Dodge International and Jhancock Real
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dodge and Jhancock is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock 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 Dodge International 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 Dodge International Stock 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 Dodge International i.e., Dodge International and Jhancock Real go up and down completely randomly.
Pair Corralation between Dodge International and Jhancock Real
Assuming the 90 days horizon Dodge International is expected to generate 1.52 times less return on investment than Jhancock Real. But when comparing it to its historical volatility, Dodge International Stock is 1.26 times less risky than Jhancock Real. It trades about 0.04 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,012 in Jhancock Real Estate on September 20, 2024 and sell it today you would earn a total of 291.00 from holding Jhancock Real Estate or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Jhancock Real Estate
Performance |
| Timeline |
| Dodge International Stock |
| Jhancock Real Estate |
Dodge International and Jhancock Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge International and Jhancock Real
The main advantage of trading using opposite Dodge International and Jhancock Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge International 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.| Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Cox Emerging | Dodge International vs. Dodge Balanced Fund | Dodge International vs. Dodge Global Stock |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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