Correlation Between Jhancock Diversified and California Tax-free
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and California Tax-free 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 Diversified and California Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Diversified Macro and California Tax Free Income, you can compare the effects of market volatilities on Jhancock Diversified and California Tax-free 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 Diversified with a short position of California Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and California Tax-free.
Diversification Opportunities for Jhancock Diversified and California Tax-free
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and California is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and California Tax Free Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Tax Free and Jhancock Diversified 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 Diversified Macro are associated (or correlated) with California Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Tax Free has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and California Tax-free go up and down completely randomly.
Pair Corralation between Jhancock Diversified and California Tax-free
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 2.04 times more return on investment than California Tax-free. However, Jhancock Diversified is 2.04 times more volatile than California Tax Free Income. It trades about 0.1 of its potential returns per unit of risk. California Tax Free Income is currently generating about 0.18 per unit of risk. If you would invest 882.00 in Jhancock Diversified Macro on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Jhancock Diversified Macro or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. California Tax Free Income
Performance |
| Timeline |
| Jhancock Diversified |
| California Tax Free |
Jhancock Diversified and California Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and California Tax-free
The main advantage of trading using opposite Jhancock Diversified and California Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, California Tax-free 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 California Tax-free will offset losses from the drop in California Tax-free's long position.| Jhancock Diversified vs. Ab Small Cap | Jhancock Diversified vs. Baird Smallmid Cap | Jhancock Diversified vs. Champlain Small | Jhancock Diversified vs. Small Midcap Dividend Income |
| California Tax-free vs. Shelton Emerging Markets | California Tax-free vs. Shelton Emerging Markets | California Tax-free vs. Shelton Funds | California Tax-free vs. Nasdaq 100 Index Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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