Correlation Between Jhancock Real and American Century
Can any of the company-specific risk be diversified away by investing in both Jhancock Real and American Century 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 Real and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Real Estate and American Century Global, you can compare the effects of market volatilities on Jhancock Real and American Century 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 Real with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Real and American Century.
Diversification Opportunities for Jhancock Real and American Century
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and American is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and American Century Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Global and Jhancock Real 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 Real Estate are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Global has no effect on the direction of Jhancock Real i.e., Jhancock Real and American Century go up and down completely randomly.
Pair Corralation between Jhancock Real and American Century
Assuming the 90 days horizon Jhancock Real Estate is expected to generate 1.03 times more return on investment than American Century. However, Jhancock Real is 1.03 times more volatile than American Century Global. It trades about 0.12 of its potential returns per unit of risk. American Century Global is currently generating about 0.08 per unit of risk. If you would invest 1,322 in Jhancock Real Estate on August 29, 2024 and sell it today you would earn a total of 32.00 from holding Jhancock Real Estate or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jhancock Real Estate vs. American Century Global
Performance |
| Timeline |
| Jhancock Real Estate |
| American Century Global |
Jhancock Real and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Real and American Century
The main advantage of trading using opposite Jhancock Real and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Real position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Jhancock Real vs. Franklin Natural Resources | Jhancock Real vs. HUMANA INC | Jhancock Real vs. Aquagold International | Jhancock Real vs. Barloworld Ltd ADR |
| American Century vs. HUMANA INC | American Century vs. Aquagold International | American Century vs. Barloworld Ltd ADR | American Century vs. Morningstar Unconstrained 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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