Correlation Between Jhancock Real and American High-income
Can any of the company-specific risk be diversified away by investing in both Jhancock Real and American High-income 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 High-income 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 High Income Municipal, you can compare the effects of market volatilities on Jhancock Real and American High-income 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 High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Real and American High-income.
Diversification Opportunities for Jhancock Real and American High-income
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jhancock and American is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Jhancock Real i.e., Jhancock Real and American High-income go up and down completely randomly.
Pair Corralation between Jhancock Real and American High-income
Assuming the 90 days horizon Jhancock Real Estate is expected to under-perform the American High-income. In addition to that, Jhancock Real is 4.8 times more volatile than American High Income Municipal. It trades about -0.33 of its total potential returns per unit of risk. American High Income Municipal is currently generating about -0.35 per unit of volatility. If you would invest 1,544 in American High Income Municipal on October 14, 2024 and sell it today you would lose (28.00) from holding American High Income Municipal or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Real Estate vs. American High Income Municipal
Performance |
| Timeline |
| Jhancock Real Estate |
| American High Income |
Jhancock Real and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Real and American High-income
The main advantage of trading using opposite Jhancock Real and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Real position performs unexpectedly, American High-income 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 High-income will offset losses from the drop in American High-income's long position.| Jhancock Real vs. Small Cap Value | Jhancock Real vs. Mid Cap 15x Strategy | Jhancock Real vs. Lsv Small Cap | Jhancock Real vs. Ultramid Cap Profund Ultramid Cap |
| American High-income vs. Rreef Property Trust | American High-income vs. Dunham Real Estate | American High-income vs. Jhancock Real Estate | American High-income vs. Baron Real Estate |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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