Correlation Between Jhancock Short and Federated Short-intermedia
Can any of the company-specific risk be diversified away by investing in both Jhancock Short and Federated Short-intermedia 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 Federated Short-intermedia 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 Federated Short Intermediate Duration, you can compare the effects of market volatilities on Jhancock Short and Federated Short-intermedia 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 Federated Short-intermedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Short and Federated Short-intermedia.
Diversification Opportunities for Jhancock Short and Federated Short-intermedia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and FEDERATED is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Federated Short Intermediate D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short-intermedia 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 Federated Short-intermedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short-intermedia has no effect on the direction of Jhancock Short i.e., Jhancock Short and Federated Short-intermedia go up and down completely randomly.
Pair Corralation between Jhancock Short and Federated Short-intermedia
Assuming the 90 days horizon Jhancock Short is expected to generate 1.49 times less return on investment than Federated Short-intermedia. But when comparing it to its historical volatility, Jhancock Short Duration is 1.14 times less risky than Federated Short-intermedia. It trades about 0.11 of its potential returns per unit of risk. Federated Short Intermediate Duration is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Federated Short Intermediate Duration on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Federated Short Intermediate Duration or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jhancock Short Duration vs. Federated Short Intermediate D
Performance |
| Timeline |
| Jhancock Short Duration |
| Federated Short-intermedia |
Jhancock Short and Federated Short-intermedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Short and Federated Short-intermedia
The main advantage of trading using opposite Jhancock Short and Federated Short-intermedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Short position performs unexpectedly, Federated Short-intermedia 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 Federated Short-intermedia will offset losses from the drop in Federated Short-intermedia's long position.| Jhancock Short vs. Permanent Portfolio Class | Jhancock Short vs. HUMANA INC | Jhancock Short vs. Aquagold International | Jhancock Short vs. Barloworld Ltd ADR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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