Correlation Between Jhancock Global and Great West

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

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

Diversification Opportunities for Jhancock Global and Great West

0.62

Correlation Coefficient

Jhancock Global  Great West

Poor diversification

The 3 months correlation between Jhancock and Great is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Global Equity and Great West Sp Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp and Jhancock Global 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 Global Equity are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Jhancock Global i.e., Jhancock Global and Great West go up and down completely randomly.

Pair Corralation between Jhancock Global and Great West

Assuming the 90 days horizon Jhancock Global is expected to generate 7.35 times less return on investment than Great West. But when comparing it to its historical volatility, Jhancock Global Equity is 2.39 times less risky than Great West. It trades about 0.05 of its potential returns per unit of risk. Great West Sp Small is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,298  in Great West Sp Small on September 12, 2024 and sell it today you would earn a total of  157.00  from holding Great West Sp Small or generate 12.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Jhancock Global Equity  vs.  Great West Sp Small

Jhancock Global Equity

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Global Equity are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jhancock Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Great West Sp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Sp Small are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Great West may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jhancock Global and Great West

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

The idea behind Jhancock Global Equity and Great West Sp Small 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.