Correlation Between Jhancock Diversified and Hotchkis Wiley

Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Hotchkis Wiley 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 Hotchkis Wiley 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 Hotchkis Wiley International, you can compare the effects of market volatilities on Jhancock Diversified and Hotchkis Wiley 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 Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Hotchkis Wiley.

Diversification Opportunities for Jhancock Diversified and Hotchkis Wiley

-0.48

Correlation Coefficient

Jhancock Diversified  Hotchkis Wiley

Very good diversification

The 3 months correlation between Jhancock and Hotchkis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Hotchkis Wiley International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Inter 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 Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Inter has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Hotchkis Wiley go up and down completely randomly.

Pair Corralation between Jhancock Diversified and Hotchkis Wiley

Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 0.46 times more return on investment than Hotchkis Wiley. However, Jhancock Diversified Macro is 2.15 times less risky than Hotchkis Wiley. It trades about 0.02 of its potential returns per unit of risk. Hotchkis Wiley International is currently generating about 0.0 per unit of risk. If you would invest  887.00  in Jhancock Diversified Macro on December 2, 2024 and sell it today you would earn a total of  47.00  from holding Jhancock Diversified Macro or generate 5.3% return on investment over 90 days.

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

Jhancock Diversified Macro  vs.  Hotchkis Wiley International

Jhancock Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 12 (%) 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.

Hotchkis Wiley Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hotchkis Wiley International 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 forward 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 Jhancock Diversified and Hotchkis Wiley

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

The idea behind Jhancock Diversified Macro and Hotchkis Wiley International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.