Correlation Between Jhancock Real and Western Asset
Can any of the company-specific risk be diversified away by investing in both Jhancock Real and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on Jhancock Real and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Real and Western Asset.
Diversification Opportunities for Jhancock Real and Western Asset
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jhancock and Western is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Jhancock Real i.e., Jhancock Real and Western Asset go up and down completely randomly.
Pair Corralation between Jhancock Real and Western Asset
Assuming the 90 days horizon Jhancock Real Estate is expected to generate 6.41 times more return on investment than Western Asset. However, Jhancock Real is 6.41 times more volatile than Western Asset High. It trades about 0.26 of its potential returns per unit of risk. Western Asset High is currently generating about 0.16 per unit of risk. If you would invest 1,300 in Jhancock Real Estate on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Jhancock Real Estate or generate 4.69% 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. Western Asset High
Performance |
| Timeline |
| Jhancock Real Estate |
| Western Asset High |
Jhancock Real and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Real and Western Asset
The main advantage of trading using opposite Jhancock Real and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Real position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Jhancock Real vs. Realty Income | Jhancock Real vs. Dynex Capital | Jhancock Real vs. First Industrial Realty | Jhancock Real vs. Healthcare Realty Trust |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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