Correlation Between Jhancock Disciplined and American Beacon
Can any of the company-specific risk be diversified away by investing in both Jhancock Disciplined and American Beacon 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 Disciplined and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Disciplined Value and American Beacon Bridgeway, you can compare the effects of market volatilities on Jhancock Disciplined and American Beacon 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 Disciplined with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Disciplined and American Beacon.
Diversification Opportunities for Jhancock Disciplined and American Beacon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Jhancock and American is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway and Jhancock Disciplined 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 Disciplined Value are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and American Beacon go up and down completely randomly.
Pair Corralation between Jhancock Disciplined and American Beacon
Assuming the 90 days horizon Jhancock Disciplined is expected to generate 1.06 times less return on investment than American Beacon. In addition to that, Jhancock Disciplined is 1.08 times more volatile than American Beacon Bridgeway. It trades about 0.28 of its total potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.32 per unit of volatility. If you would invest 2,680 in American Beacon Bridgeway on September 1, 2024 and sell it today you would earn a total of 193.00 from holding American Beacon Bridgeway or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jhancock Disciplined Value vs. American Beacon Bridgeway
Performance |
| Timeline |
| Jhancock Disciplined |
| American Beacon Bridgeway |
Jhancock Disciplined and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Disciplined and American Beacon
The main advantage of trading using opposite Jhancock Disciplined and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Jhancock Disciplined vs. Goldman Sachs Short Term | Jhancock Disciplined vs. Old Westbury Short Term | Jhancock Disciplined vs. Aqr Sustainable Long Short | Jhancock Disciplined vs. Jhancock Short Duration |
| American Beacon vs. Victory Strategic Allocation | American Beacon vs. Jhancock Disciplined Value | American Beacon vs. Morningstar Unconstrained Allocation | American Beacon vs. Aqr Large Cap |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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