Correlation Between Jhancock Multi and Barrow Hanley
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi and Barrow Hanley 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 and Barrow Hanley 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 Barrow Hanley Floating, you can compare the effects of market volatilities on Jhancock Multi and Barrow Hanley 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 with a short position of Barrow Hanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi and Barrow Hanley.
Diversification Opportunities for Jhancock Multi and Barrow Hanley
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Barrow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Barrow Hanley Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrow Hanley Floating and Jhancock Multi 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 Barrow Hanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrow Hanley Floating has no effect on the direction of Jhancock Multi i.e., Jhancock Multi and Barrow Hanley go up and down completely randomly.
Pair Corralation between Jhancock Multi and Barrow Hanley
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 0.95 times more return on investment than Barrow Hanley. However, Jhancock Multi Index 2065 is 1.06 times less risky than Barrow Hanley. It trades about 0.08 of its potential returns per unit of risk. Barrow Hanley Floating is currently generating about -0.14 per unit of risk. If you would invest 1,505 in Jhancock Multi Index 2065 on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Jhancock Multi Index 2065 or generate 0.8% 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. Barrow Hanley Floating
Performance |
| Timeline |
| Jhancock Multi Index |
| Barrow Hanley Floating |
Jhancock Multi and Barrow Hanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi and Barrow Hanley
The main advantage of trading using opposite Jhancock Multi and Barrow Hanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi position performs unexpectedly, Barrow Hanley 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 Barrow Hanley will offset losses from the drop in Barrow Hanley's long position.| Jhancock Multi vs. Invesco Energy Fund | Jhancock Multi vs. Firsthand Alternative Energy | Jhancock Multi vs. Alpsalerian Energy Infrastructure | Jhancock Multi vs. Icon Natural Resources |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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