Correlation Between Jhancock Diversified and Bats Series
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Bats Series 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 Bats Series 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 Bats Series C, you can compare the effects of market volatilities on Jhancock Diversified and Bats Series 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 Bats Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Bats Series.
Diversification Opportunities for Jhancock Diversified and Bats Series
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jhancock and Bats is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Bats Series C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series C 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 Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series C has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Bats Series go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Bats Series
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 1.62 times more return on investment than Bats Series. However, Jhancock Diversified is 1.62 times more volatile than Bats Series C. It trades about 0.18 of its potential returns per unit of risk. Bats Series C is currently generating about 0.07 per unit of risk. If you would invest 909.00 in Jhancock Diversified Macro on November 7, 2024 and sell it today you would earn a total of 17.00 from holding Jhancock Diversified Macro or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. Bats Series C
Performance |
| Timeline |
| Jhancock Diversified |
| Bats Series C |
Jhancock Diversified and Bats Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Bats Series
The main advantage of trading using opposite Jhancock Diversified and Bats Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Bats Series 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 Bats Series will offset losses from the drop in Bats Series' long position.The idea behind Jhancock Diversified Macro and Bats Series C 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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