Correlation Between Jhancock Multi and Global Equity

Can any of the company-specific risk be diversified away by investing in both Jhancock Multi and Global Equity 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 Jhancock Multi and Global Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jhancock Multi Index 2065 and Global Equity Fund, you can compare the effects of market volatilities on Jhancock Multi and Global Equity 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 Jhancock Multi with a short position of Global Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi and Global Equity.

Diversification Opportunities for Jhancock Multi and Global Equity

0.73

Correlation Coefficient

Jhancock Multi  Global Equity

Poor diversification

The 3 months correlation between Jhancock and Global is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 and Global Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Equity and Jhancock Multi 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 Jhancock Multi Index 2065 are associated (or correlated) with Global Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Equity has no effect on the direction of Jhancock Multi i.e., Jhancock Multi and Global Equity go up and down completely randomly.

Pair Corralation between Jhancock Multi and Global Equity

Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 1.08 times more return on investment than Global Equity. However, Jhancock Multi is 1.08 times more volatile than Global Equity Fund. It trades about 0.17 of its potential returns per unit of risk. Global Equity Fund is currently generating about 0.05 per unit of risk. If you would invest  1,427  in Jhancock Multi Index 2065 on September 12, 2024 and sell it today you would earn a total of  90.00  from holding Jhancock Multi Index 2065 or generate 6.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Jhancock Multi Index 2065  vs.  Global Equity Fund

Jhancock Multi Index

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Multi Index 2065 are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Jhancock Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Equity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Equity Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Global Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jhancock Multi and Global Equity

The main advantage of trading using opposite Jhancock Multi and Global Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi position performs unexpectedly, Global Equity 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 Global Equity will offset losses from the drop in Global Equity's long position.

The idea behind Jhancock Multi Index 2065 and Global Equity Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.