Correlation Between GM and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Jhancock Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Jhancock Diversified Macro, you can compare the effects of market volatilities on GM 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 GM with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jhancock Diversified.
Diversification Opportunities for GM and Jhancock Diversified
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Jhancock is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and GM 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 General Motors 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 GM i.e., GM and Jhancock Diversified go up and down completely randomly.
Pair Corralation between GM and Jhancock Diversified
Allowing for the 90-day total investment horizon General Motors is expected to generate 4.3 times more return on investment than Jhancock Diversified. However, GM is 4.3 times more volatile than Jhancock Diversified Macro. It trades about 0.28 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about -0.11 per unit of risk. If you would invest 4,648 in General Motors on August 28, 2024 and sell it today you would earn a total of 1,372 from holding General Motors or generate 29.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Jhancock Diversified Macro
Performance |
| Timeline |
| General Motors |
| Jhancock Diversified |
GM and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Jhancock Diversified
The main advantage of trading using opposite GM and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Jhancock Diversified Macro pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jhancock Diversified vs. Iaadx | Jhancock Diversified vs. Rbb Fund | Jhancock Diversified vs. Falcon Focus Scv | Jhancock Diversified vs. Leggmason Partners Institutional |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |