Correlation Between Disciplined Growth and Jhancock Diversified

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

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

Diversification Opportunities for Disciplined Growth and Jhancock Diversified

-0.17

Correlation Coefficient

Disciplined Growth  Jhancock Diversified

Good diversification

The 3 months correlation between Disciplined and Jhancock is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Disciplined Growth Fund and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and Disciplined Growth 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 Disciplined Growth Fund are associated (or correlated) with Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Disciplined Growth i.e., Disciplined Growth and Jhancock Diversified go up and down completely randomly.

Pair Corralation between Disciplined Growth and Jhancock Diversified

Assuming the 90 days horizon Disciplined Growth Fund is expected to generate 1.76 times more return on investment than Jhancock Diversified. However, Disciplined Growth is 1.76 times more volatile than Jhancock Diversified Macro. It trades about 0.21 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.04 per unit of risk. If you would invest  2,855  in Disciplined Growth Fund on September 4, 2024 and sell it today you would earn a total of  386.00  from holding Disciplined Growth Fund or generate 13.52% return on investment over 90 days.

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

Disciplined Growth Fund  vs.  Jhancock Diversified Macro

Disciplined Growth

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Disciplined Growth Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Disciplined Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Jhancock Diversified

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 3 (%) 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.

Pair Trading with Disciplined Growth and Jhancock Diversified

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

The idea behind Disciplined Growth Fund and Jhancock Diversified Macro 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.