Correlation Between Jhancock Disciplined and Navigator Equity

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

Diversification Opportunities for Jhancock Disciplined and Navigator Equity

0.24

Correlation Coefficient

Jhancock Disciplined  Navigator Equity

Modest diversification

The 3 months correlation between JHancock and Navigator is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Navigator Equity Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Equity Hedged 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 Navigator Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Equity Hedged has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Navigator Equity go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Navigator Equity

If you would invest  150,000  in Navigator Equity Hedged on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Navigator Equity Hedged or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	20.0%
Values	Daily Returns

Jhancock Disciplined Value  vs.  Navigator Equity Hedged

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 weak performance in the last few months, the Fund's basic 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.

Navigator Equity Hedged

Risk-Adjusted Performance

Weak

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

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

The idea behind Jhancock Disciplined Value and Navigator Equity Hedged 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.