Correlation Between Jhancock Diversified and Pax High
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Pax High 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 Pax High 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 Pax High Yield, you can compare the effects of market volatilities on Jhancock Diversified and Pax High 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 Pax High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Pax High.
Diversification Opportunities for Jhancock Diversified and Pax High
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and Pax is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Pax High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax High Yield 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 Pax High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax High Yield has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Pax High go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Pax High
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 2.21 times more return on investment than Pax High. However, Jhancock Diversified is 2.21 times more volatile than Pax High Yield. It trades about 0.21 of its potential returns per unit of risk. Pax High Yield is currently generating about 0.27 per unit of risk. If you would invest 903.00 in Jhancock Diversified Macro on October 25, 2024 and sell it today you would earn a total of 18.00 from holding Jhancock Diversified Macro or generate 1.99% 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. Pax High Yield
Performance |
| Timeline |
| Jhancock Diversified |
| Pax High Yield |
Jhancock Diversified and Pax High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Pax High
The main advantage of trading using opposite Jhancock Diversified and Pax High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Pax High 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 Pax High will offset losses from the drop in Pax High's long position.The idea behind Jhancock Diversified Macro and Pax High Yield 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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