Correlation Between Regional Bank and Jhancock Global
Can any of the company-specific risk be diversified away by investing in both Regional Bank and Jhancock Global 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 Global 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 Global Thematic, you can compare the effects of market volatilities on Regional Bank and Jhancock Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Jhancock Global.
Diversification Opportunities for Regional Bank and Jhancock Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regional and Jhancock is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and Jhancock Global Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Thematic 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Thematic has no effect on the direction of Regional Bank i.e., Regional Bank and Jhancock Global go up and down completely randomly.
Pair Corralation between Regional Bank and Jhancock Global
Assuming the 90 days horizon Regional Bank Fund is expected to generate 1.63 times more return on investment than Jhancock Global. However, Regional Bank is 1.63 times more volatile than Jhancock Global Thematic. It trades about 0.2 of its potential returns per unit of risk. Jhancock Global Thematic is currently generating about 0.24 per unit of risk. If you would invest 2,668 in Regional Bank Fund on November 7, 2024 and sell it today you would earn a total of 132.00 from holding Regional Bank Fund or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Bank Fund vs. Jhancock Global Thematic
Performance |
| Timeline |
| Regional Bank |
| Jhancock Global Thematic |
Regional Bank and Jhancock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and Jhancock Global
The main advantage of trading using opposite Regional Bank and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank position performs unexpectedly, Jhancock Global 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 Global will offset losses from the drop in Jhancock Global's long position.| Regional Bank vs. Ab Global Bond | Regional Bank vs. Baird Quality Intermediate | Regional Bank vs. T Rowe Price | Regional Bank vs. Artisan High Income |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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