Correlation Between Jhancock Global and New Perspective
Can any of the company-specific risk be diversified away by investing in both Jhancock Global and New Perspective 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 Global and New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Global Equity and New Perspective Fund, you can compare the effects of market volatilities on Jhancock Global and New Perspective 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 Global with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Global and New Perspective.
Diversification Opportunities for Jhancock Global and New Perspective
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jhancock and New is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Global Equity and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and Jhancock Global 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 Global Equity are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Jhancock Global i.e., Jhancock Global and New Perspective go up and down completely randomly.
Pair Corralation between Jhancock Global and New Perspective
Assuming the 90 days horizon Jhancock Global Equity is expected to generate 0.77 times more return on investment than New Perspective. However, Jhancock Global Equity is 1.3 times less risky than New Perspective. It trades about 0.22 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.11 per unit of risk. If you would invest 1,162 in Jhancock Global Equity on December 3, 2024 and sell it today you would earn a total of 66.00 from holding Jhancock Global Equity or generate 5.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jhancock Global Equity vs. New Perspective Fund
Performance |
Timeline |
Jhancock Global Equity |
New Perspective |
Jhancock Global and New Perspective Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jhancock Global and New Perspective
The main advantage of trading using opposite Jhancock Global and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Global position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.Jhancock Global vs. Shelton Emerging Markets | Jhancock Global vs. Ashmore Emerging Markets | Jhancock Global vs. Massmutual Premier Diversified | Jhancock Global vs. Franklin Federal Limited Term |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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