Correlation Between Inflation-protected and Jhancock Multimanager
Can any of the company-specific risk be diversified away by investing in both Inflation-protected and Jhancock Multimanager 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 Inflation-protected and Jhancock Multimanager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Jhancock Multimanager 2065, you can compare the effects of market volatilities on Inflation-protected and Jhancock Multimanager 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 Inflation-protected with a short position of Jhancock Multimanager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Jhancock Multimanager.
Diversification Opportunities for Inflation-protected and Jhancock Multimanager
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inflation-protected and Jhancock is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Jhancock Multimanager 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multimanager and Inflation-protected 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 Inflation Protected Bond Fund are associated (or correlated) with Jhancock Multimanager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multimanager has no effect on the direction of Inflation-protected i.e., Inflation-protected and Jhancock Multimanager go up and down completely randomly.
Pair Corralation between Inflation-protected and Jhancock Multimanager
Assuming the 90 days horizon Inflation-protected is expected to generate 1.21 times less return on investment than Jhancock Multimanager. But when comparing it to its historical volatility, Inflation Protected Bond Fund is 1.65 times less risky than Jhancock Multimanager. It trades about 0.45 of its potential returns per unit of risk. Jhancock Multimanager 2065 is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,341 in Jhancock Multimanager 2065 on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Jhancock Multimanager 2065 or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Jhancock Multimanager 2065
Performance |
| Timeline |
| Inflation Protected |
| Jhancock Multimanager |
Inflation-protected and Jhancock Multimanager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Jhancock Multimanager
The main advantage of trading using opposite Inflation-protected and Jhancock Multimanager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected position performs unexpectedly, Jhancock Multimanager 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 Multimanager will offset losses from the drop in Jhancock Multimanager's long position.| Inflation-protected vs. American Funds Inflation | Inflation-protected vs. American Funds Inflation | Inflation-protected vs. American Funds Inflation | Inflation-protected vs. American Funds Inflation |
| Jhancock Multimanager vs. Ab Bond Inflation | Jhancock Multimanager vs. T Rowe Price | Jhancock Multimanager vs. Arrow Managed Futures | Jhancock Multimanager vs. Inflation Protected Bond Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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