Correlation Between Jhancock Short and Chartwell Short
Can any of the company-specific risk be diversified away by investing in both Jhancock Short and Chartwell 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 Jhancock Short and Chartwell Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Short Duration and Chartwell Short Duration, you can compare the effects of market volatilities on Jhancock Short and Chartwell 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 Jhancock Short with a short position of Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Short and Chartwell Short.
Diversification Opportunities for Jhancock Short and Chartwell Short
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Chartwell is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration and Jhancock Short 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 Jhancock Short Duration are associated (or correlated) with Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Jhancock Short i.e., Jhancock Short and Chartwell Short go up and down completely randomly.
Pair Corralation between Jhancock Short and Chartwell Short
Assuming the 90 days horizon Jhancock Short is expected to generate 3.9 times less return on investment than Chartwell Short. In addition to that, Jhancock Short is 1.25 times more volatile than Chartwell Short Duration. It trades about 0.04 of its total potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.19 per unit of volatility. If you would invest 950.00 in Chartwell Short Duration on August 23, 2024 and sell it today you would earn a total of 4.00 from holding Chartwell Short Duration or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Short Duration vs. Chartwell Short Duration
Performance |
| Timeline |
| Jhancock Short Duration |
| Chartwell Short Duration |
Jhancock Short and Chartwell Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Short and Chartwell Short
The main advantage of trading using opposite Jhancock Short and Chartwell Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Short position performs unexpectedly, Chartwell 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 Chartwell Short will offset losses from the drop in Chartwell Short's long position.The idea behind Jhancock Short Duration and Chartwell Short Duration 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.
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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 Stocks Directory module to find actively traded stocks across global markets.
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