Correlation Between Jhancock Diversified and Holbrook Income

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

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

Diversification Opportunities for Jhancock Diversified and Holbrook Income

0.39

Correlation Coefficient

Jhancock Diversified  Holbrook Income

Weak diversification

The 3 months correlation between Jhancock and Holbrook is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Holbrook Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holbrook Income and Jhancock Diversified 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 Diversified Macro are associated (or correlated) with Holbrook Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holbrook Income has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Holbrook Income go up and down completely randomly.

Pair Corralation between Jhancock Diversified and Holbrook Income

Assuming the 90 days horizon Jhancock Diversified is expected to generate 3.79 times less return on investment than Holbrook Income. In addition to that, Jhancock Diversified is 2.63 times more volatile than Holbrook Income Fund. It trades about 0.01 of its total potential returns per unit of risk. Holbrook Income Fund is currently generating about 0.12 per unit of volatility. If you would invest  853.00  in Holbrook Income Fund on October 25, 2024 and sell it today you would earn a total of  118.00  from holding Holbrook Income Fund or generate 13.83% return on investment over 90 days.

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

Jhancock Diversified Macro  vs.  Holbrook Income Fund

Jhancock Diversified

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 7 (%) 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.

Holbrook Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Holbrook Income Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Holbrook Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jhancock Diversified and Holbrook Income

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

The idea behind Jhancock Diversified Macro and Holbrook Income Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.