Correlation Between Jhancock Multi and Global Equity
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi and Global Equity 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 Global Equity 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 Global Equity Fund, you can compare the effects of market volatilities on Jhancock Multi and Global Equity 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 Global Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi and Global Equity.
Diversification Opportunities for Jhancock Multi and Global Equity
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Global Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Equity 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 Global Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Equity has no effect on the direction of Jhancock Multi i.e., Jhancock Multi and Global Equity go up and down completely randomly.
Pair Corralation between Jhancock Multi and Global Equity
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 1.21 times more return on investment than Global Equity. However, Jhancock Multi is 1.21 times more volatile than Global Equity Fund. It trades about 0.09 of its potential returns per unit of risk. Global Equity Fund is currently generating about 0.08 per unit of risk. If you would invest 1,469 in Jhancock Multi Index 2065 on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Jhancock Multi Index 2065 or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. Global Equity Fund
Performance |
| Timeline |
| Jhancock Multi Index |
| Global Equity |
Jhancock Multi and Global Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi and Global Equity
The main advantage of trading using opposite Jhancock Multi and Global Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi position performs unexpectedly, Global Equity 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 Global Equity will offset losses from the drop in Global Equity's long position.| Jhancock Multi vs. Regional Bank Fund | Jhancock Multi vs. Regional Bank Fund | Jhancock Multi vs. Multimanager Lifestyle Moderate | Jhancock Multi vs. Multimanager Lifestyle Balanced |
| Global Equity vs. T Rowe Price | Global Equity vs. Nuveen All American Municipal | Global Equity vs. Transamerica Intermediate Muni | Global Equity vs. Nuveen Minnesota Municipal |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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