Correlation Between Jhancock Disciplined and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Jhancock Disciplined and Old Westbury 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 Old Westbury 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 Old Westbury New, you can compare the effects of market volatilities on Jhancock Disciplined and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Disciplined and Old Westbury.
Diversification Opportunities for Jhancock Disciplined and Old Westbury
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jhancock and Old is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Old Westbury New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury New 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury New has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Old Westbury go up and down completely randomly.
Pair Corralation between Jhancock Disciplined and Old Westbury
Assuming the 90 days horizon Jhancock Disciplined Value is expected to generate 4.65 times more return on investment than Old Westbury. However, Jhancock Disciplined is 4.65 times more volatile than Old Westbury New. It trades about 0.09 of its potential returns per unit of risk. Old Westbury New is currently generating about 0.06 per unit of risk. If you would invest 1,938 in Jhancock Disciplined Value on September 5, 2024 and sell it today you would earn a total of 809.00 from holding Jhancock Disciplined Value or generate 41.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Jhancock Disciplined Value vs. Old Westbury New
Performance |
| Timeline |
| Jhancock Disciplined |
| Old Westbury New |
Jhancock Disciplined and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Disciplined and Old Westbury
The main advantage of trading using opposite Jhancock Disciplined and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Jhancock Disciplined vs. Regional Bank Fund | Jhancock Disciplined vs. Regional Bank Fund | Jhancock Disciplined vs. Multimanager Lifestyle Moderate | Jhancock Disciplined vs. Multimanager Lifestyle Balanced |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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