Correlation Between Classic Value and Jhancock Real
Can any of the company-specific risk be diversified away by investing in both Classic Value and Jhancock Real 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 Classic Value and Jhancock Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Classic Value Fund and Jhancock Real Estate, you can compare the effects of market volatilities on Classic Value and Jhancock Real 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 Classic Value with a short position of Jhancock Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Classic Value and Jhancock Real.
Diversification Opportunities for Classic Value and Jhancock Real
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Classic and Jhancock is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Classic Value Fund and Jhancock Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Real Estate and Classic Value 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 Classic Value Fund are associated (or correlated) with Jhancock Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Real Estate has no effect on the direction of Classic Value i.e., Classic Value and Jhancock Real go up and down completely randomly.
Pair Corralation between Classic Value and Jhancock Real
Assuming the 90 days horizon Classic Value Fund is expected to generate 1.25 times more return on investment than Jhancock Real. However, Classic Value is 1.25 times more volatile than Jhancock Real Estate. It trades about 0.13 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about 0.08 per unit of risk. If you would invest 3,621 in Classic Value Fund on August 30, 2024 and sell it today you would earn a total of 217.00 from holding Classic Value Fund or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Classic Value Fund vs. Jhancock Real Estate
Performance |
| Timeline |
| Classic Value |
| Jhancock Real Estate |
Classic Value and Jhancock Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Classic Value and Jhancock Real
The main advantage of trading using opposite Classic Value and Jhancock Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Classic Value position performs unexpectedly, Jhancock Real 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 Jhancock Real will offset losses from the drop in Jhancock Real's long position.| Classic Value vs. Jhancock Real Estate | Classic Value vs. Commonwealth Real Estate | Classic Value vs. Teachers Insurance And | Classic Value vs. T Rowe Price |
| Jhancock Real vs. Realty Income | Jhancock Real vs. Dynex Capital | Jhancock Real vs. First Industrial Realty | Jhancock Real vs. Healthcare Realty Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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