Correlation Between Aston/crosswind Small and Jhancock Real

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Can any of the company-specific risk be diversified away by investing in both Aston/crosswind Small and Jhancock Real 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 Aston/crosswind Small and Jhancock Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoncrosswind Small Cap and Jhancock Real Estate, you can compare the effects of market volatilities on Aston/crosswind Small and Jhancock Real 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 Aston/crosswind Small with a short position of Jhancock Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston/crosswind Small and Jhancock Real.

Diversification Opportunities for Aston/crosswind Small and Jhancock Real

0.62
  Correlation Coefficient

Poor diversification

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

Pair Corralation between Aston/crosswind Small and Jhancock Real

Assuming the 90 days horizon Astoncrosswind Small Cap is expected to generate 0.97 times more return on investment than Jhancock Real. However, Astoncrosswind Small Cap is 1.03 times less risky than Jhancock Real. It trades about -0.27 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about -0.31 per unit of risk. If you would invest  1,847  in Astoncrosswind Small Cap on October 8, 2024 and sell it today you would lose (103.00) from holding Astoncrosswind Small Cap or give up 5.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Astoncrosswind Small Cap  vs.  Jhancock Real Estate

 Performance 
       Timeline  
Astoncrosswind Small Cap 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Astoncrosswind Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Aston/crosswind Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Jhancock Real Estate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Aston/crosswind Small and Jhancock Real Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aston/crosswind Small and Jhancock Real

The main advantage of trading using opposite Aston/crosswind Small and Jhancock Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston/crosswind Small position performs unexpectedly, Jhancock Real 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 Real will offset losses from the drop in Jhancock Real's long position.
The idea behind Astoncrosswind Small Cap and Jhancock Real Estate 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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