Correlation Between Jhancock Multi-index and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi-index and Transamerica Financial 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 Transamerica Financial 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 Transamerica Financial Life, you can compare the effects of market volatilities on Jhancock Multi-index and Transamerica Financial 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 Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi-index and Transamerica Financial.
Diversification Opportunities for Jhancock Multi-index and Transamerica Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Transamerica is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Jhancock Multi-index i.e., Jhancock Multi-index and Transamerica Financial go up and down completely randomly.
Pair Corralation between Jhancock Multi-index and Transamerica Financial
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 0.58 times more return on investment than Transamerica Financial. However, Jhancock Multi Index 2065 is 1.74 times less risky than Transamerica Financial. It trades about -0.27 of its potential returns per unit of risk. Transamerica Financial Life is currently generating about -0.31 per unit of risk. If you would invest 1,521 in Jhancock Multi Index 2065 on October 7, 2024 and sell it today you would lose (101.00) from holding Jhancock Multi Index 2065 or give up 6.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. Transamerica Financial Life
Performance |
| Timeline |
| Jhancock Multi Index |
| Transamerica Financial |
Jhancock Multi-index and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi-index and Transamerica Financial
The main advantage of trading using opposite Jhancock Multi-index and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi-index position performs unexpectedly, Transamerica Financial 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Jhancock Multi-index vs. Dws Government Money | Jhancock Multi-index vs. Blrc Sgy Mnp | Jhancock Multi-index vs. Leader Short Term Bond | Jhancock Multi-index vs. Georgia Tax Free Bond |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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