Correlation Between Jhancock Diversified and Franklin New
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Jhancock Diversified and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Franklin New.
Diversification Opportunities for Jhancock Diversified and Franklin New
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Franklin New go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Franklin New
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 2.24 times more return on investment than Franklin New. However, Jhancock Diversified is 2.24 times more volatile than Franklin New York. It trades about 0.15 of its potential returns per unit of risk. Franklin New York is currently generating about 0.19 per unit of risk. If you would invest 887.00 in Jhancock Diversified Macro on September 4, 2024 and sell it today you would earn a total of 14.00 from holding Jhancock Diversified Macro or generate 1.58% 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. Franklin New York
Performance |
| Timeline |
| Jhancock Diversified |
| Franklin New York |
Jhancock Diversified and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Franklin New
The main advantage of trading using opposite Jhancock Diversified and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New'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 |
| Franklin New vs. Vanguard Financials Index | Franklin New vs. Icon Financial Fund | Franklin New vs. Fidelity Advisor Financial | Franklin New vs. Blackrock Financial Institutions |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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