Correlation Between Regional Bank and Jhancock Disciplined
Can any of the company-specific risk be diversified away by investing in both Regional Bank and Jhancock Disciplined 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 Regional Bank and Jhancock Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Bank Fund and Jhancock Disciplined Value, you can compare the effects of market volatilities on Regional Bank and Jhancock Disciplined 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 Regional Bank with a short position of Jhancock Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Jhancock Disciplined.
Diversification Opportunities for Regional Bank and Jhancock Disciplined
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regional and Jhancock is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and Jhancock Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Disciplined and Regional Bank 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 Regional Bank Fund are associated (or correlated) with Jhancock Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Disciplined has no effect on the direction of Regional Bank i.e., Regional Bank and Jhancock Disciplined go up and down completely randomly.
Pair Corralation between Regional Bank and Jhancock Disciplined
Assuming the 90 days horizon Regional Bank Fund is expected to generate 2.69 times more return on investment than Jhancock Disciplined. However, Regional Bank is 2.69 times more volatile than Jhancock Disciplined Value. It trades about 0.2 of its potential returns per unit of risk. Jhancock Disciplined Value is currently generating about 0.22 per unit of risk. If you would invest 2,997 in Regional Bank Fund on August 29, 2024 and sell it today you would earn a total of 391.00 from holding Regional Bank Fund or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Bank Fund vs. Jhancock Disciplined Value
Performance |
| Timeline |
| Regional Bank |
| Jhancock Disciplined |
Regional Bank and Jhancock Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and Jhancock Disciplined
The main advantage of trading using opposite Regional Bank and Jhancock Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank position performs unexpectedly, Jhancock Disciplined 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 Disciplined will offset losses from the drop in Jhancock Disciplined's long position.| Regional Bank vs. California Bond Fund | Regional Bank vs. Ishares Municipal Bond | Regional Bank vs. Bbh Intermediate Municipal | Regional Bank vs. Franklin High Yield |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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