Correlation Between Multimanager Lifestyle and Jhancock Short
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Jhancock Short 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 Jhancock Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Moderate and Jhancock Short Duration, you can compare the effects of market volatilities on Multimanager Lifestyle and Jhancock Short 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 Jhancock Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Jhancock Short.
Diversification Opportunities for Multimanager Lifestyle and Jhancock Short
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multimanager and Jhancock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Moderat and Jhancock Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Short Duration 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 Moderate are associated (or correlated) with Jhancock Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Short Duration has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Jhancock Short go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Jhancock Short
Assuming the 90 days horizon Multimanager Lifestyle Moderate is expected to generate 2.59 times more return on investment than Jhancock Short. However, Multimanager Lifestyle is 2.59 times more volatile than Jhancock Short Duration. It trades about 0.02 of its potential returns per unit of risk. Jhancock Short Duration is currently generating about 0.04 per unit of risk. If you would invest 1,250 in Multimanager Lifestyle Moderate on August 23, 2024 and sell it today you would earn a total of 2.00 from holding Multimanager Lifestyle Moderate or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Moderat vs. Jhancock Short Duration
Performance |
| Timeline |
| Multimanager Lifestyle |
| Jhancock Short Duration |
Multimanager Lifestyle and Jhancock Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Jhancock Short
The main advantage of trading using opposite Multimanager Lifestyle and Jhancock Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Jhancock Short 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 Short will offset losses from the drop in Jhancock Short's long position.| Multimanager Lifestyle vs. Ubs Money Series | Multimanager Lifestyle vs. Hewitt Money Market | Multimanager Lifestyle vs. General Money Market | Multimanager Lifestyle vs. John Hancock Money |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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