Correlation Between Jhancock Diversified and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Kensington Active 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 Kensington Active 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 Kensington Active Advantage, you can compare the effects of market volatilities on Jhancock Diversified and Kensington Active 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 Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Kensington Active.
Diversification Opportunities for Jhancock Diversified and Kensington Active
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jhancock and Kensington is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active 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 Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Kensington Active go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Kensington Active
Assuming the 90 days horizon Jhancock Diversified Macro is expected to under-perform the Kensington Active. In addition to that, Jhancock Diversified is 1.36 times more volatile than Kensington Active Advantage. It trades about -0.1 of its total potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.08 per unit of volatility. If you would invest 982.00 in Kensington Active Advantage on September 3, 2024 and sell it today you would earn a total of 46.00 from holding Kensington Active Advantage or generate 4.68% 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. Kensington Active Advantage
Performance |
| Timeline |
| Jhancock Diversified |
| Kensington Active |
Jhancock Diversified and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Kensington Active
The main advantage of trading using opposite Jhancock Diversified and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.| Jhancock Diversified vs. Goldman Sachs Short | Jhancock Diversified vs. Angel Oak Ultrashort | Jhancock Diversified vs. Siit Ultra Short | Jhancock Diversified vs. Sterling Capital Short |
| Kensington Active vs. Commonwealth Real Estate | Kensington Active vs. Tiaa Cref Real Estate | Kensington Active vs. Forum Real Estate | Kensington Active vs. Virtus Real Estate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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