Correlation Between Smallcap Growth and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Jhancock Diversified 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 Diversified 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 Diversified Macro, you can compare the effects of market volatilities on Smallcap Growth and Jhancock Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Jhancock Diversified.
Diversification Opportunities for Smallcap Growth and Jhancock Diversified
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smallcap and Jhancock is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified 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 Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Smallcap Growth and Jhancock Diversified
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 3.08 times more return on investment than Jhancock Diversified. However, Smallcap Growth is 3.08 times more volatile than Jhancock Diversified Macro. It trades about 0.26 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.23 per unit of risk. If you would invest 1,073 in Smallcap Growth Fund on September 5, 2024 and sell it today you would earn a total of 77.00 from holding Smallcap Growth Fund or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Smallcap Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Jhancock Diversified |
Smallcap Growth and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Jhancock Diversified
The main advantage of trading using opposite Smallcap Growth and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Jhancock Diversified 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 Diversified will offset losses from the drop in Jhancock Diversified's long position.| Smallcap Growth vs. Blackrock Conservative Prprdptfinstttnl | Smallcap Growth vs. Fidelity Advisor Diversified | Smallcap Growth vs. Evaluator Conservative Rms | Smallcap Growth vs. Adams Diversified Equity |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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