Correlation Between Jhancock Disciplined and Virtus Kar

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

Diversification Opportunities for Jhancock Disciplined and Virtus Kar

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Jhancock and Virtus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Virtus Kar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Small 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 Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Small has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Virtus Kar go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Virtus Kar

Assuming the 90 days horizon Jhancock Disciplined Value is expected to under-perform the Virtus Kar. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jhancock Disciplined Value is 1.2 times less risky than Virtus Kar. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Virtus Kar Small Cap is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,667  in Virtus Kar Small Cap on September 28, 2024 and sell it today you would lose (256.00) from holding Virtus Kar Small Cap or give up 6.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.41%
ValuesDaily Returns

Jhancock Disciplined Value  vs.  Virtus Kar Small Cap

 Performance 
       Timeline  
Jhancock Disciplined 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Virtus Kar Small 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Virtus Kar Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Virtus Kar is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jhancock Disciplined and Virtus Kar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jhancock Disciplined and Virtus Kar

The main advantage of trading using opposite Jhancock Disciplined and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined position performs unexpectedly, Virtus Kar 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 Virtus Kar will offset losses from the drop in Virtus Kar's long position.
The idea behind Jhancock Disciplined Value and Virtus Kar Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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