Correlation Between Jhancock Disciplined and Diamond Hill

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

Diversification Opportunities for Jhancock Disciplined and Diamond Hill

-0.59

Correlation Coefficient

Jhancock Disciplined  Diamond Hill

Excellent diversification

The 3 months correlation between Jhancock and Diamond is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Diamond Hill International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Interna 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Interna has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Diamond Hill go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Diamond Hill

Assuming the 90 days horizon Jhancock Disciplined Value is expected to generate 1.06 times more return on investment than Diamond Hill. However, Jhancock Disciplined is 1.06 times more volatile than Diamond Hill International. It trades about 0.09 of its potential returns per unit of risk. Diamond Hill International is currently generating about 0.07 per unit of risk. If you would invest  1,930  in Jhancock Disciplined Value on September 12, 2024 and sell it today you would earn a total of  763.00  from holding Jhancock Disciplined Value or generate 39.53% return on investment over 90 days.

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

Jhancock Disciplined Value  vs.  Diamond Hill International

Jhancock Disciplined

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Disciplined Value are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jhancock Disciplined may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Diamond Hill Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diamond Hill International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Diamond Hill 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 Diamond Hill

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

The idea behind Jhancock Disciplined Value and Diamond Hill 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.