Correlation Between Jhancock Real and Thornburg

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

By analyzing existing cross correlation between Jhancock Real Estate and Thornburg E Growth, you can compare the effects of market volatilities on Jhancock Real and Thornburg 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 Real with a short position of Thornburg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Real and Thornburg.

Diversification Opportunities for Jhancock Real and Thornburg

0.55

Correlation Coefficient

Jhancock Real  Thornburg

Very weak diversification

The 3 months correlation between Jhancock and Thornburg is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth and Jhancock Real 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 Real Estate are associated (or correlated) with Thornburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Jhancock Real i.e., Jhancock Real and Thornburg go up and down completely randomly.

Pair Corralation between Jhancock Real and Thornburg

Assuming the 90 days horizon Jhancock Real Estate is expected to under-perform the Thornburg. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jhancock Real Estate is 1.45 times less risky than Thornburg. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Thornburg E Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,884  in Thornburg E Growth on September 13, 2024 and sell it today you would earn a total of  329.00  from holding Thornburg E Growth or generate 11.41% return on investment over 90 days.

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

Jhancock Real Estate  vs.  Thornburg E Growth

Jhancock Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Jhancock Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thornburg E Growth

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Jhancock Real and Thornburg

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

The idea behind Jhancock Real Estate and Thornburg E Growth 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.