Correlation Between Jhancock Diversified and Miller Opportunity
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Miller Opportunity 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 Miller Opportunity 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 Miller Opportunity Trust, you can compare the effects of market volatilities on Jhancock Diversified and Miller Opportunity 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 Miller Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Miller Opportunity.
Diversification Opportunities for Jhancock Diversified and Miller Opportunity
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and Miller is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Miller Opportunity Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Opportunity Trust 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 Miller Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Opportunity Trust has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Miller Opportunity go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Miller Opportunity
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 0.37 times more return on investment than Miller Opportunity. However, Jhancock Diversified Macro is 2.7 times less risky than Miller Opportunity. It trades about 0.14 of its potential returns per unit of risk. Miller Opportunity Trust is currently generating about -0.07 per unit of risk. If you would invest 910.00 in Jhancock Diversified Macro on November 27, 2024 and sell it today you would earn a total of 11.00 from holding Jhancock Diversified Macro or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. Miller Opportunity Trust
Performance |
| Timeline |
| Jhancock Diversified |
| Miller Opportunity Trust |
Jhancock Diversified and Miller Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Miller Opportunity
The main advantage of trading using opposite Jhancock Diversified and Miller Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Miller Opportunity 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 Miller Opportunity will offset losses from the drop in Miller Opportunity's long position.The idea behind Jhancock Diversified Macro and Miller Opportunity Trust 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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