Correlation Between Multimanager Lifestyle and J Hancock
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and J Hancock 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 Multimanager Lifestyle and J Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Balanced and J Hancock Ii, you can compare the effects of market volatilities on Multimanager Lifestyle and J Hancock 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 Multimanager Lifestyle with a short position of J Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and J Hancock.
Diversification Opportunities for Multimanager Lifestyle and J Hancock
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multimanager and JRODX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Balance and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii and Multimanager Lifestyle 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 Multimanager Lifestyle Balanced are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and J Hancock go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and J Hancock
Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 1.34 times less return on investment than J Hancock. But when comparing it to its historical volatility, Multimanager Lifestyle Balanced is 1.51 times less risky than J Hancock. It trades about 0.22 of its potential returns per unit of risk. J Hancock Ii is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,627 in J Hancock Ii on August 31, 2024 and sell it today you would earn a total of 48.00 from holding J Hancock Ii or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Balance vs. J Hancock Ii
Performance |
| Timeline |
| Multimanager Lifestyle |
| J Hancock Ii |
Multimanager Lifestyle and J Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and J Hancock
The main advantage of trading using opposite Multimanager Lifestyle and J Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, J Hancock 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 J Hancock will offset losses from the drop in J Hancock's long position.The idea behind Multimanager Lifestyle Balanced and J Hancock Ii 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.
| J Hancock vs. Pioneer High Yield | J Hancock vs. Ab High Income | J Hancock vs. Morningstar Aggressive Growth | J Hancock vs. Federated Institutional High |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |