Correlation Between Jhancock Diversified and Eafe Choice
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Eafe Choice 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 Eafe Choice 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 The Eafe Choice, you can compare the effects of market volatilities on Jhancock Diversified and Eafe Choice 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 Eafe Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Eafe Choice.
Diversification Opportunities for Jhancock Diversified and Eafe Choice
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Eafe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and The Eafe Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Choice 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 Eafe Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Choice has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Eafe Choice go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Eafe Choice
Assuming the 90 days horizon Jhancock Diversified is expected to generate 20.67 times less return on investment than Eafe Choice. But when comparing it to its historical volatility, Jhancock Diversified Macro is 1.74 times less risky than Eafe Choice. It trades about 0.0 of its potential returns per unit of risk. The Eafe Choice is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,375 in The Eafe Choice on September 2, 2024 and sell it today you would earn a total of 142.00 from holding The Eafe Choice or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. The Eafe Choice
Performance |
| Timeline |
| Jhancock Diversified |
| Eafe Choice |
Jhancock Diversified and Eafe Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Eafe Choice
The main advantage of trading using opposite Jhancock Diversified and Eafe Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Eafe Choice 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 Eafe Choice will offset losses from the drop in Eafe Choice's long position.| Jhancock Diversified vs. Regional Bank Fund | Jhancock Diversified vs. Regional Bank Fund | Jhancock Diversified vs. Multimanager Lifestyle Moderate | Jhancock Diversified vs. Multimanager Lifestyle Balanced |
| Eafe Choice vs. Aqr Diversified Arbitrage | Eafe Choice vs. Prudential Core Conservative | Eafe Choice vs. Jhancock Diversified Macro | Eafe Choice vs. Calvert Conservative Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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