Correlation Between Jhancock Diversified and High Yield
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Jhancock Diversified and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and High Yield.
Diversification Opportunities for Jhancock Diversified and High Yield
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jhancock and High is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and High Yield go up and down completely randomly.
Pair Corralation between Jhancock Diversified and High Yield
Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 0.81 times more return on investment than High Yield. However, Jhancock Diversified Macro is 1.24 times less risky than High Yield. It trades about -0.02 of its potential returns per unit of risk. High Yield Fund is currently generating about -0.27 per unit of risk. If you would invest 913.00 in Jhancock Diversified Macro on October 12, 2024 and sell it today you would lose (1.00) from holding Jhancock Diversified Macro or give up 0.11% 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. High Yield Fund
Performance |
| Timeline |
| Jhancock Diversified |
| High Yield Fund |
Jhancock Diversified and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and High Yield
The main advantage of trading using opposite Jhancock Diversified and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.The idea behind Jhancock Diversified Macro and High Yield Fund 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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