Correlation Between Vanguard Energy and Jhancock Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Energy and Jhancock Global 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 Vanguard Energy and Jhancock Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Energy Index and Jhancock Global Equity, you can compare the effects of market volatilities on Vanguard Energy and Jhancock Global 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 Vanguard Energy with a short position of Jhancock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Energy and Jhancock Global.
Diversification Opportunities for Vanguard Energy and Jhancock Global
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Jhancock is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Energy Index and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity and Vanguard Energy 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 Vanguard Energy Index are associated (or correlated) with Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Vanguard Energy i.e., Vanguard Energy and Jhancock Global go up and down completely randomly.
Pair Corralation between Vanguard Energy and Jhancock Global
Assuming the 90 days horizon Vanguard Energy is expected to generate 3.68 times less return on investment than Jhancock Global. In addition to that, Vanguard Energy is 1.75 times more volatile than Jhancock Global Equity. It trades about 0.03 of its total potential returns per unit of risk. Jhancock Global Equity is currently generating about 0.2 per unit of volatility. If you would invest 1,176 in Jhancock Global Equity on November 6, 2024 and sell it today you would earn a total of 29.00 from holding Jhancock Global Equity or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Energy Index vs. Jhancock Global Equity
Performance |
| Timeline |
| Vanguard Energy Index |
| Jhancock Global Equity |
Vanguard Energy and Jhancock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Energy and Jhancock Global
The main advantage of trading using opposite Vanguard Energy and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Energy position performs unexpectedly, Jhancock Global 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 Global will offset losses from the drop in Jhancock Global's long position.| Vanguard Energy vs. Vanguard Financials Index | Vanguard Energy vs. Vanguard Utilities Index | Vanguard Energy vs. Vanguard Materials Index | Vanguard Energy vs. Vanguard Sumer Staples |
| Jhancock Global vs. Calvert Moderate Allocation | Jhancock Global vs. Fidelity Managed Retirement | Jhancock Global vs. College Retirement Equities | Jhancock Global vs. Franklin Lifesmart Retirement |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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