Correlation Between Jhancock Disciplined and The Hartford

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

Diversification Opportunities for Jhancock Disciplined and The Hartford

0.16

Correlation Coefficient

Jhancock Disciplined  The Hartford

Average diversification

The 3 months correlation between Jhancock and The is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and The Hartford Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Municipal 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Municipal has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and The Hartford go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and The Hartford

Assuming the 90 days horizon Jhancock Disciplined Value is expected to under-perform the The Hartford. In addition to that, Jhancock Disciplined is 4.86 times more volatile than The Hartford Municipal. It trades about -0.02 of its total potential returns per unit of risk. The Hartford Municipal is currently generating about 0.09 per unit of volatility. If you would invest  824.00  in The Hartford Municipal on December 24, 2024 and sell it today you would earn a total of  8.00  from holding The Hartford Municipal or generate 0.97% return on investment over 90 days.

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

Jhancock Disciplined Value  vs.  The Hartford Municipal

Jhancock Disciplined

Risk-Adjusted Performance

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 fairly strong basic indicators, Jhancock Disciplined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Hartford Municipal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Municipal are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford 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 The Hartford

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

The idea behind Jhancock Disciplined Value and The Hartford Municipal 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.