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 Europacific 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
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Jhancock is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Europacific 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 Europacific 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 Europacific is expected to generate 1.37 times more return on investment than Jhancock Diversified. However, American Funds is 1.37 times more volatile than Jhancock Diversified Macro. It trades about 0.05 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about -0.01 per unit of risk. If you would invest 5,185 in American Funds Europacific on September 12, 2024 and sell it today you would earn a total of 726.00 from holding American Funds Europacific or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
American Funds Europacific vs. Jhancock Diversified Macro
Performance |
| Timeline |
| American Funds Europ |
| 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. Jhancock Diversified Macro | American Funds vs. Tiaa Cref Small Cap Blend | American Funds vs. Lord Abbett Diversified | American Funds vs. Oaktree Diversifiedome |
| Jhancock Diversified vs. Sentinel Small Pany | Jhancock Diversified vs. Blackrock Sm Cap | Jhancock Diversified vs. Tiaa Cref Small Cap Blend | Jhancock Diversified vs. Davenport Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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