Correlation Between Financial Industries and Jhancock Global
Can any of the company-specific risk be diversified away by investing in both Financial Industries and Jhancock Global 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 Financial Industries and Jhancock Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Jhancock Global Equity, you can compare the effects of market volatilities on Financial Industries and Jhancock Global 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 Financial Industries with a short position of Jhancock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Jhancock Global.
Diversification Opportunities for Financial Industries and Jhancock Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and Jhancock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity and Financial Industries 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 Financial Industries Fund are associated (or correlated) with Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Financial Industries i.e., Financial Industries and Jhancock Global go up and down completely randomly.
Pair Corralation between Financial Industries and Jhancock Global
Assuming the 90 days horizon Financial Industries Fund is expected to under-perform the Jhancock Global. In addition to that, Financial Industries is 1.61 times more volatile than Jhancock Global Equity. It trades about -0.11 of its total potential returns per unit of risk. Jhancock Global Equity is currently generating about -0.08 per unit of volatility. If you would invest 1,220 in Jhancock Global Equity on December 24, 2024 and sell it today you would lose (19.00) from holding Jhancock Global Equity or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. Jhancock Global Equity
Performance |
| Timeline |
| Financial Industries |
| Jhancock Global Equity |
Financial Industries and Jhancock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Jhancock Global
The main advantage of trading using opposite Financial Industries and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries position performs unexpectedly, Jhancock Global 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 Jhancock Global will offset losses from the drop in Jhancock Global's long position.| Financial Industries vs. United Kingdom Small | Financial Industries vs. Aqr Small Cap | Financial Industries vs. Hunter Small Cap | Financial Industries vs. Transamerica International Small |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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