Correlation Between Jhancock Diversified and Strengthening Dollar
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Strengthening Dollar 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 Strengthening Dollar 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 Strengthening Dollar 2x, you can compare the effects of market volatilities on Jhancock Diversified and Strengthening Dollar 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 Strengthening Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Strengthening Dollar.
Diversification Opportunities for Jhancock Diversified and Strengthening Dollar
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jhancock and Strengthening is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Strengthening Dollar 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strengthening Dollar 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 Strengthening Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strengthening Dollar has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Strengthening Dollar go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Strengthening Dollar
Assuming the 90 days horizon Jhancock Diversified is expected to generate 3.14 times less return on investment than Strengthening Dollar. But when comparing it to its historical volatility, Jhancock Diversified Macro is 2.18 times less risky than Strengthening Dollar. It trades about 0.15 of its potential returns per unit of risk. Strengthening Dollar 2x is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,428 in Strengthening Dollar 2x on September 4, 2024 and sell it today you would earn a total of 321.00 from holding Strengthening Dollar 2x or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. Strengthening Dollar 2x
Performance |
| Timeline |
| Jhancock Diversified |
| Strengthening Dollar |
Jhancock Diversified and Strengthening Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Strengthening Dollar
The main advantage of trading using opposite Jhancock Diversified and Strengthening Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, Strengthening Dollar 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 Strengthening Dollar will offset losses from the drop in Strengthening Dollar'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 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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