Correlation Between Jhancock Disciplined and Columbia Emerging

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

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

Diversification Opportunities for Jhancock Disciplined and Columbia Emerging

0.18

Correlation Coefficient

Jhancock Disciplined  Columbia Emerging

Average diversification

The 3 months correlation between Jhancock and Columbia is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets and Jhancock Disciplined 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 Disciplined Value are associated (or correlated) with Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Columbia Emerging go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Columbia Emerging

Assuming the 90 days horizon Jhancock Disciplined Value is expected to under-perform the Columbia Emerging. In addition to that, Jhancock Disciplined is 5.26 times more volatile than Columbia Emerging Markets. It trades about -0.04 of its total potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.13 per unit of volatility. If you would invest  922.00  in Columbia Emerging Markets on October 4, 2024 and sell it today you would earn a total of  32.00  from holding Columbia Emerging Markets or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.8%
Values	Daily Returns

Jhancock Disciplined Value  vs.  Columbia Emerging Markets

Jhancock Disciplined

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Columbia Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Emerging 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 Disciplined and Columbia Emerging

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

The idea behind Jhancock Disciplined Value and Columbia Emerging Markets 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.