Correlation Between Jhancock Real and American Funds
Can any of the company-specific risk be diversified away by investing in both Jhancock Real and American Funds 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 Funds 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 Funds Amcap, you can compare the effects of market volatilities on Jhancock Real and American Funds 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 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Real and American Funds.
Diversification Opportunities for Jhancock Real and American Funds
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and American Funds Amcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Amcap 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 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Amcap has no effect on the direction of Jhancock Real i.e., Jhancock Real and American Funds go up and down completely randomly.
Pair Corralation between Jhancock Real and American Funds
Assuming the 90 days horizon Jhancock Real is expected to generate 1.49 times less return on investment than American Funds. In addition to that, Jhancock Real is 1.21 times more volatile than American Funds Amcap. It trades about 0.05 of its total potential returns per unit of risk. American Funds Amcap is currently generating about 0.09 per unit of volatility. If you would invest 3,048 in American Funds Amcap on August 27, 2024 and sell it today you would earn a total of 1,514 from holding American Funds Amcap or generate 49.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Real Estate vs. American Funds Amcap
Performance |
| Timeline |
| Jhancock Real Estate |
| American Funds Amcap |
Jhancock Real and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Real and American Funds
The main advantage of trading using opposite Jhancock Real and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Real position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Jhancock Real vs. Rational Strategic Allocation | Jhancock Real vs. Gmo Equity Allocation | Jhancock Real vs. Aqr Large Cap | Jhancock Real vs. Morningstar Unconstrained Allocation |
| American Funds vs. Columbia Real Estate | American Funds vs. Jhancock Real Estate | American Funds vs. Commonwealth Real Estate | American Funds vs. Amg Managers Centersquare |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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