Correlation Between American Funds and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both American Funds and Jhancock Multi-index 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 Multi-index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2065 and Jhancock Multi Index 2065, you can compare the effects of market volatilities on American Funds and Jhancock Multi-index 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 Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Jhancock Multi-index.
Diversification Opportunities for American Funds and Jhancock Multi-index
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Jhancock is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2065 and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 2065 are associated (or correlated) with Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of American Funds i.e., American Funds and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between American Funds and Jhancock Multi-index
Assuming the 90 days horizon American Funds 2065 is expected to generate 0.95 times more return on investment than Jhancock Multi-index. However, American Funds 2065 is 1.05 times less risky than Jhancock Multi-index. It trades about 0.09 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.09 per unit of risk. If you would invest 1,323 in American Funds 2065 on September 3, 2024 and sell it today you would earn a total of 503.00 from holding American Funds 2065 or generate 38.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2065 vs. Jhancock Multi Index 2065
Performance |
| Timeline |
| American Funds 2065 |
| Jhancock Multi Index |
American Funds and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Jhancock Multi-index
The main advantage of trading using opposite American Funds and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Jhancock Multi-index 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 Multi-index will offset losses from the drop in Jhancock Multi-index's long position.| American Funds vs. Nasdaq 100 Fund Class | American Funds vs. Vanguard Windsor Fund | American Funds vs. Commonwealth Global Fund | American Funds vs. Growth Strategy Fund |
| Jhancock Multi-index vs. Vanguard Target Retirement | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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