Correlation Between Smallcap Fund and Jhancock Real
Can any of the company-specific risk be diversified away by investing in both Smallcap Fund and Jhancock Real 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 Fund and Jhancock Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Fund Fka and Jhancock Real Estate, you can compare the effects of market volatilities on Smallcap Fund and Jhancock Real 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 Fund with a short position of Jhancock Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Fund and Jhancock Real.
Diversification Opportunities for Smallcap Fund and Jhancock Real
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smallcap and Jhancock is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka and Jhancock Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Real Estate and Smallcap Fund 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 Fund Fka are associated (or correlated) with Jhancock Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Real Estate has no effect on the direction of Smallcap Fund i.e., Smallcap Fund and Jhancock Real go up and down completely randomly.
Pair Corralation between Smallcap Fund and Jhancock Real
Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 0.98 times more return on investment than Jhancock Real. However, Smallcap Fund Fka is 1.02 times less risky than Jhancock Real. It trades about -0.26 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about -0.27 per unit of risk. If you would invest 2,731 in Smallcap Fund Fka on October 16, 2024 and sell it today you would lose (180.00) from holding Smallcap Fund Fka or give up 6.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Smallcap Fund Fka vs. Jhancock Real Estate
Performance |
Timeline |
Smallcap Fund Fka |
Jhancock Real Estate |
Smallcap Fund and Jhancock Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Smallcap Fund and Jhancock Real
The main advantage of trading using opposite Smallcap Fund and Jhancock Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund position performs unexpectedly, Jhancock Real 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 Real will offset losses from the drop in Jhancock Real's long position.Smallcap Fund vs. Conservative Balanced Allocation | Smallcap Fund vs. Tax Free Conservative Income | Smallcap Fund vs. Adams Diversified Equity | Smallcap Fund vs. Manning Napier Diversified |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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