Correlation Between Jhancock Diversified and Pacific Funds

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

By analyzing existing cross correlation between Jhancock Diversified Macro and Pacific Funds Ultra, you can compare the effects of market volatilities on Jhancock Diversified and Pacific Funds 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 Diversified with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Pacific Funds.

Diversification Opportunities for Jhancock Diversified and Pacific Funds

-0.39

Correlation Coefficient

Jhancock Diversified  Pacific Funds

Very good diversification

The 3 months correlation between Jhancock and Pacific is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Pacific Funds Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Ultra and Jhancock Diversified 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 Diversified Macro are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Ultra has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Pacific Funds go up and down completely randomly.

Pair Corralation between Jhancock Diversified and Pacific Funds

Assuming the 90 days horizon Jhancock Diversified is expected to generate 1.32 times less return on investment than Pacific Funds. In addition to that, Jhancock Diversified is 6.33 times more volatile than Pacific Funds Ultra. It trades about 0.02 of its total potential returns per unit of risk. Pacific Funds Ultra is currently generating about 0.18 per unit of volatility. If you would invest  987.00  in Pacific Funds Ultra on September 3, 2024 and sell it today you would earn a total of  10.00  from holding Pacific Funds Ultra or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jhancock Diversified Macro  vs.  Pacific Funds Ultra

Jhancock Diversified

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pacific Funds Ultra

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Funds Ultra are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pacific Funds 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 Diversified and Pacific Funds

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

The idea behind Jhancock Diversified Macro and Pacific Funds Ultra 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.