Correlation Between Jhancock Multi-index and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi-index and Multimanager Lifestyle 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 Jhancock Multi-index and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Multi Index 2065 and Multimanager Lifestyle Moderate, you can compare the effects of market volatilities on Jhancock Multi-index and Multimanager Lifestyle 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 Jhancock Multi-index with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi-index and Multimanager Lifestyle.
Diversification Opportunities for Jhancock Multi-index and Multimanager Lifestyle
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Multimanager is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Jhancock Multi-index 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 Jhancock Multi Index 2065 are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Jhancock Multi-index i.e., Jhancock Multi-index and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Jhancock Multi-index and Multimanager Lifestyle
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 1.88 times more return on investment than Multimanager Lifestyle. However, Jhancock Multi-index is 1.88 times more volatile than Multimanager Lifestyle Moderate. It trades about 0.09 of its potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.09 per unit of risk. If you would invest 1,089 in Jhancock Multi Index 2065 on August 30, 2024 and sell it today you would earn a total of 413.00 from holding Jhancock Multi Index 2065 or generate 37.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. Multimanager Lifestyle Moderat
Performance |
| Timeline |
| Jhancock Multi Index |
| Multimanager Lifestyle |
Jhancock Multi-index and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi-index and Multimanager Lifestyle
The main advantage of trading using opposite Jhancock Multi-index and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi-index position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Jhancock Multi-index vs. Regional Bank Fund | Jhancock Multi-index vs. Regional Bank Fund | Jhancock Multi-index vs. Multimanager Lifestyle Moderate | Jhancock Multi-index vs. Multimanager Lifestyle Balanced |
| Multimanager Lifestyle vs. Vanguard High Yield Tax Exempt | Multimanager Lifestyle vs. Artisan High Income | Multimanager Lifestyle vs. T Rowe Price | Multimanager Lifestyle vs. Morningstar Aggressive Growth |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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