Correlation Between Blue Chip and Jhancock Global

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

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

Diversification Opportunities for Blue Chip and Jhancock Global

0.69

Correlation Coefficient

Blue Chip  Jhancock Global

Poor diversification

The 3 months correlation between Blue and Jhancock is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Blue Chip Growth and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity and Blue Chip 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 Blue Chip Growth are associated (or correlated) with Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Blue Chip i.e., Blue Chip and Jhancock Global go up and down completely randomly.

Pair Corralation between Blue Chip and Jhancock Global

Assuming the 90 days horizon Blue Chip Growth is expected to generate 0.92 times more return on investment than Jhancock Global. However, Blue Chip Growth is 1.08 times less risky than Jhancock Global. It trades about 0.0 of its potential returns per unit of risk. Jhancock Global Equity is currently generating about -0.13 per unit of risk. If you would invest  5,922  in Blue Chip Growth on October 23, 2024 and sell it today you would lose (36.00) from holding Blue Chip Growth or give up 0.61% of portfolio value over 90 days.

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

Blue Chip Growth  vs.  Jhancock Global Equity

Blue Chip Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jhancock Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Blue Chip and Jhancock Global

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

The idea behind Blue Chip Growth and Jhancock Global Equity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.