Correlation Between Smallcap Growth and Jhancock Multimanager
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Jhancock Multimanager 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 Smallcap Growth and Jhancock Multimanager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Jhancock Multimanager 2065, you can compare the effects of market volatilities on Smallcap Growth and Jhancock Multimanager 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 Smallcap Growth with a short position of Jhancock Multimanager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Jhancock Multimanager.
Diversification Opportunities for Smallcap Growth and Jhancock Multimanager
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Smallcap and Jhancock is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Jhancock Multimanager 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multimanager and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Jhancock Multimanager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multimanager has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Jhancock Multimanager go up and down completely randomly.
Pair Corralation between Smallcap Growth and Jhancock Multimanager
Assuming the 90 days horizon Smallcap Growth is expected to generate 1.36 times less return on investment than Jhancock Multimanager. In addition to that, Smallcap Growth is 2.51 times more volatile than Jhancock Multimanager 2065. It trades about 0.03 of its total potential returns per unit of risk. Jhancock Multimanager 2065 is currently generating about 0.11 per unit of volatility. If you would invest 1,382 in Jhancock Multimanager 2065 on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Jhancock Multimanager 2065 or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Jhancock Multimanager 2065
Performance |
| Timeline |
| Smallcap Growth |
| Jhancock Multimanager |
Smallcap Growth and Jhancock Multimanager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Jhancock Multimanager
The main advantage of trading using opposite Smallcap Growth and Jhancock Multimanager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Jhancock Multimanager 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 Jhancock Multimanager will offset losses from the drop in Jhancock Multimanager's long position.| Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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