Correlation Between Forum Real and Jhancock Disciplined

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

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

Diversification Opportunities for Forum Real and Jhancock Disciplined

-0.37

Correlation Coefficient

Forum Real  Jhancock Disciplined

Very good diversification

The 3 months correlation between Forum and JHancock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Forum Real Estate and Jhancock Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Disciplined and Forum 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 Forum Real Estate are associated (or correlated) with Jhancock Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Disciplined has no effect on the direction of Forum Real i.e., Forum Real and Jhancock Disciplined go up and down completely randomly.

Pair Corralation between Forum Real and Jhancock Disciplined

Assuming the 90 days horizon Forum Real Estate is expected to generate 0.07 times more return on investment than Jhancock Disciplined. However, Forum Real Estate is 13.66 times less risky than Jhancock Disciplined. It trades about 0.74 of its potential returns per unit of risk. Jhancock Disciplined Value is currently generating about -0.24 per unit of risk. If you would invest  960.00  in Forum Real Estate on December 4, 2024 and sell it today you would earn a total of  9.00  from holding Forum Real Estate or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Forum Real Estate  vs.  Jhancock Disciplined Value

Forum Real Estate

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Forum Real Estate are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Forum Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jhancock Disciplined

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jhancock Disciplined Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Forum Real and Jhancock Disciplined

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

The idea behind Forum Real Estate and Jhancock Disciplined Value 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.