Correlation Between Vela Short and Jhancock Short
Can any of the company-specific risk be diversified away by investing in both Vela Short and Jhancock Short 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 Vela Short and Jhancock Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vela Short Duration and Jhancock Short Duration, you can compare the effects of market volatilities on Vela Short and Jhancock Short 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 Vela Short with a short position of Jhancock Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vela Short and Jhancock Short.
Diversification Opportunities for Vela Short and Jhancock Short
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vela and Jhancock is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vela Short Duration and Jhancock Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Short Duration and Vela Short 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 Vela Short Duration are associated (or correlated) with Jhancock Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Short Duration has no effect on the direction of Vela Short i.e., Vela Short and Jhancock Short go up and down completely randomly.
Pair Corralation between Vela Short and Jhancock Short
Assuming the 90 days horizon Vela Short is expected to generate 1.02 times less return on investment than Jhancock Short. But when comparing it to its historical volatility, Vela Short Duration is 1.13 times less risky than Jhancock Short. It trades about 0.05 of its potential returns per unit of risk. Jhancock Short Duration is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 934.00 in Jhancock Short Duration on November 6, 2024 and sell it today you would earn a total of 2.00 from holding Jhancock Short Duration or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.87% |
| Values | Daily Returns |
Vela Short Duration vs. Jhancock Short Duration
Performance |
| Timeline |
| Vela Short Duration |
| Jhancock Short Duration |
Vela Short and Jhancock Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vela Short and Jhancock Short
The main advantage of trading using opposite Vela Short and Jhancock Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vela Short position performs unexpectedly, Jhancock Short 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 Short will offset losses from the drop in Jhancock Short's long position.| Vela Short vs. Gabelli Convertible And | Vela Short vs. Fidelity Sai Convertible | Vela Short vs. Calamos Dynamic Convertible | Vela Short vs. Allianzgi Convertible Income |
| Jhancock Short vs. Ab Bond Inflation | Jhancock Short vs. Baird Quality Intermediate | Jhancock Short vs. T Rowe Price | Jhancock Short vs. Mirova Global Green |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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