Correlation Between Jhancock Multimanager and Lifestyle
Can any of the company-specific risk be diversified away by investing in both Jhancock Multimanager and 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 Multimanager and Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Multimanager 2065 and Lifestyle Ii Aggressive, you can compare the effects of market volatilities on Jhancock Multimanager and 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 Multimanager with a short position of Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multimanager and Lifestyle.
Diversification Opportunities for Jhancock Multimanager and Lifestyle
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jhancock and Lifestyle is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multimanager 2065 and Lifestyle Ii Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Ii Aggressive and Jhancock Multimanager 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 Multimanager 2065 are associated (or correlated) with Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Ii Aggressive has no effect on the direction of Jhancock Multimanager i.e., Jhancock Multimanager and Lifestyle go up and down completely randomly.
Pair Corralation between Jhancock Multimanager and Lifestyle
Assuming the 90 days horizon Jhancock Multimanager is expected to generate 1.1 times less return on investment than Lifestyle. In addition to that, Jhancock Multimanager is 1.0 times more volatile than Lifestyle Ii Aggressive. It trades about 0.14 of its total potential returns per unit of risk. Lifestyle Ii Aggressive is currently generating about 0.15 per unit of volatility. If you would invest 1,377 in Lifestyle Ii Aggressive on August 30, 2024 and sell it today you would earn a total of 31.00 from holding Lifestyle Ii Aggressive or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jhancock Multimanager 2065 vs. Lifestyle Ii Aggressive
Performance |
| Timeline |
| Jhancock Multimanager |
| Lifestyle Ii Aggressive |
Jhancock Multimanager and Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multimanager and Lifestyle
The main advantage of trading using opposite Jhancock Multimanager and Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multimanager position performs unexpectedly, 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 Lifestyle will offset losses from the drop in Lifestyle's long position.The idea behind Jhancock Multimanager 2065 and Lifestyle Ii Aggressive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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