Correlation Between Jhancock Disciplined and Columbia Large

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

Diversification Opportunities for Jhancock Disciplined and Columbia Large

0.17

Correlation Coefficient

Jhancock Disciplined  Columbia Large

Average diversification

The 3 months correlation between Jhancock and Columbia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Columbia Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Large Cap has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Columbia Large go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Columbia Large

Assuming the 90 days horizon Jhancock Disciplined is expected to generate 2.49 times less return on investment than Columbia Large. In addition to that, Jhancock Disciplined is 1.11 times more volatile than Columbia Large Cap. It trades about 0.04 of its total potential returns per unit of risk. Columbia Large Cap is currently generating about 0.1 per unit of volatility. If you would invest  2,001  in Columbia Large Cap on September 26, 2024 and sell it today you would earn a total of  986.00  from holding Columbia Large Cap or generate 49.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.17%
Values	Daily Returns

Jhancock Disciplined Value  vs.  Columbia Large Cap

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Columbia Large Cap

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Columbia Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Columbia Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jhancock Disciplined and Columbia Large

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

The idea behind Jhancock Disciplined Value and Columbia Large Cap 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.