Correlation Between Regional Bank and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both Regional Bank 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 Regional Bank 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 Regional Bank Fund and Jhancock Multi Index 2065, you can compare the effects of market volatilities on Regional Bank 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 Regional Bank with a short position of Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Jhancock Multi-index.
Diversification Opportunities for Regional Bank and Jhancock Multi-index
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regional and Jhancock is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund 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 Regional Bank 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 Regional Bank Fund 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 Regional Bank i.e., Regional Bank and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between Regional Bank and Jhancock Multi-index
Assuming the 90 days horizon Regional Bank Fund is expected to under-perform the Jhancock Multi-index. In addition to that, Regional Bank is 1.83 times more volatile than Jhancock Multi Index 2065. It trades about -0.14 of its total potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.01 per unit of volatility. If you would invest 1,446 in Jhancock Multi Index 2065 on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Jhancock Multi Index 2065 or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Bank Fund vs. Jhancock Multi Index 2065
Performance |
| Timeline |
| Regional Bank |
| Jhancock Multi Index |
Regional Bank and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and Jhancock Multi-index
The main advantage of trading using opposite Regional Bank and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank 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.| Regional Bank vs. Adams Natural Resources | Regional Bank vs. Pimco Energy Tactical | Regional Bank vs. Invesco Energy Fund | Regional Bank vs. World Energy Fund |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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