Correlation Between Jhancock Diversified and Columbia Greater
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Columbia Greater 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 Columbia Greater 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 Columbia Greater China, you can compare the effects of market volatilities on Jhancock Diversified and Columbia Greater 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 Columbia Greater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Columbia Greater.
Diversification Opportunities for Jhancock Diversified and Columbia Greater
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jhancock and Columbia is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Columbia Greater China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Greater China 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 Columbia Greater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Greater China has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Columbia Greater go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Columbia Greater
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 0.35 times more return on investment than Columbia Greater. However, Jhancock Diversified Macro is 2.9 times less risky than Columbia Greater. It trades about 0.0 of its potential returns per unit of risk. Columbia Greater China is currently generating about 0.0 per unit of risk. If you would invest 903.00 in Jhancock Diversified Macro on August 24, 2024 and sell it today you would lose (2.00) from holding Jhancock Diversified Macro or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. Columbia Greater China
Performance |
| Timeline |
| Jhancock Diversified |
| Columbia Greater China |
Jhancock Diversified and Columbia Greater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Columbia Greater
The main advantage of trading using opposite Jhancock Diversified and Columbia Greater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Columbia Greater 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 Columbia Greater will offset losses from the drop in Columbia Greater's long position.The idea behind Jhancock Diversified Macro and Columbia Greater China 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 Stocks Directory module to find actively traded stocks across global markets.
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