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 Aggressive, 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
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Jhancock and MULTIMANAGER is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Multimanager Lifestyle Aggress 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 0.96 times more return on investment than Multimanager Lifestyle. However, Jhancock Multi Index 2065 is 1.04 times less risky than Multimanager Lifestyle. It trades about 0.09 of its potential returns per unit of risk. Multimanager Lifestyle Aggressive is currently generating about 0.08 per unit of risk. If you would invest 1,109 in Jhancock Multi Index 2065 on September 3, 2024 and sell it today you would earn a total of 402.00 from holding Jhancock Multi Index 2065 or generate 36.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. Multimanager Lifestyle Aggress
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. Vanguard Target Retirement | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 |
| Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. Franklin Mutual Shares | Multimanager Lifestyle vs. Franklin Mutual Shares |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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