Correlation Between Johcm International and Johcm Global
Can any of the company-specific risk be diversified away by investing in both Johcm International and Johcm 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 Johcm International and Johcm Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johcm International Select and Johcm Global Equity, you can compare the effects of market volatilities on Johcm International and Johcm 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 Johcm International with a short position of Johcm Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm International and Johcm Global.
Diversification Opportunities for Johcm International and Johcm Global
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Johcm and Johcm is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Johcm International Select and Johcm Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Global Equity and Johcm International 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 Johcm International Select are associated (or correlated) with Johcm Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Global Equity has no effect on the direction of Johcm International i.e., Johcm International and Johcm Global go up and down completely randomly.
Pair Corralation between Johcm International and Johcm Global
Assuming the 90 days horizon Johcm International is expected to generate 3.06 times less return on investment than Johcm Global. But when comparing it to its historical volatility, Johcm International Select is 1.15 times less risky than Johcm Global. It trades about 0.02 of its potential returns per unit of risk. Johcm Global Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,278 in Johcm Global Equity on August 26, 2024 and sell it today you would earn a total of 220.00 from holding Johcm Global Equity or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johcm International Select vs. Johcm Global Equity
Performance |
| Timeline |
| Johcm International |
| Johcm Global Equity |
Johcm International and Johcm Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johcm International and Johcm Global
The main advantage of trading using opposite Johcm International and Johcm Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johcm International position performs unexpectedly, Johcm 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 Johcm Global will offset losses from the drop in Johcm Global's long position.| Johcm International vs. Regnan Uk Umbrella | Johcm International vs. Tsw Emerging Markets | Johcm International vs. Johcm Emerging Markets | Johcm International vs. Johcm International Select |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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