Correlation Between Jhancock Short and Federated Ohio
Can any of the company-specific risk be diversified away by investing in both Jhancock Short and Federated Ohio 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 Ohio 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 Ohio Municipal, you can compare the effects of market volatilities on Jhancock Short and Federated Ohio 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 Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Short and Federated Ohio.
Diversification Opportunities for Jhancock Short and Federated Ohio
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and FEDERATED is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Federated Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ohio Municipal 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 Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ohio Municipal has no effect on the direction of Jhancock Short i.e., Jhancock Short and Federated Ohio go up and down completely randomly.
Pair Corralation between Jhancock Short and Federated Ohio
Assuming the 90 days horizon Jhancock Short is expected to generate 5.4 times less return on investment than Federated Ohio. But when comparing it to its historical volatility, Jhancock Short Duration is 3.42 times less risky than Federated Ohio. It trades about 0.11 of its potential returns per unit of risk. Federated Ohio Municipal is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Federated Ohio Municipal on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Federated Ohio Municipal or generate 1.15% 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. Federated Ohio Municipal
Performance |
| Timeline |
| Jhancock Short Duration |
| Federated Ohio Municipal |
Jhancock Short and Federated Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Short and Federated Ohio
The main advantage of trading using opposite Jhancock Short and Federated Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Short position performs unexpectedly, Federated Ohio 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 Ohio will offset losses from the drop in Federated Ohio's long position.| Jhancock Short vs. Goehring Rozencwajg Resources | Jhancock Short vs. Oil Gas Ultrasector | Jhancock Short vs. Franklin Natural Resources | Jhancock Short vs. Energy Services Fund |
| Federated Ohio vs. Federated Emerging Market | Federated Ohio vs. Federated Mdt All | Federated Ohio vs. Federated Mdt Balanced | Federated Ohio vs. Federated Global Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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