Correlation Between Johcm Emerging and Johcm International

Can any of the company-specific risk be diversified away by investing in both Johcm Emerging and Johcm International 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 Johcm Emerging and Johcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Johcm Emerging Markets and Johcm International Opportunities, you can compare the effects of market volatilities on Johcm Emerging and Johcm International 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 Johcm Emerging with a short position of Johcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm Emerging and Johcm International.

Diversification Opportunities for Johcm Emerging and Johcm International

0.82

Correlation Coefficient

Johcm Emerging  Johcm International

Very poor diversification

The 3 months correlation between Johcm and Johcm is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Johcm Emerging Markets and Johcm International Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm International and Johcm Emerging 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 Johcm Emerging Markets are associated (or correlated) with Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Johcm Emerging i.e., Johcm Emerging and Johcm International go up and down completely randomly.

Pair Corralation between Johcm Emerging and Johcm International

Assuming the 90 days horizon Johcm Emerging Markets is expected to generate 1.05 times more return on investment than Johcm International. However, Johcm Emerging is 1.05 times more volatile than Johcm International Opportunities. It trades about -0.17 of its potential returns per unit of risk. Johcm International Opportunities is currently generating about -0.19 per unit of risk. If you would invest  1,240  in Johcm Emerging Markets on October 10, 2024 and sell it today you would lose (103.00) from holding Johcm Emerging Markets or give up 8.31% of portfolio value over 90 days.

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

Johcm Emerging Markets  vs.  Johcm International Opportunit

Johcm Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johcm Emerging Markets 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.

Johcm International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johcm International Opportunities 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.

Pair Trading with Johcm Emerging and Johcm International

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

The idea behind Johcm Emerging Markets and Johcm International Opportunities 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.