Correlation Between Jhancock Short and Dreyfus Global

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

By analyzing existing cross correlation between Jhancock Short Duration and Dreyfus Global Real, you can compare the effects of market volatilities on Jhancock Short and Dreyfus Global 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 Short with a short position of Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Short and Dreyfus Global.

Diversification Opportunities for Jhancock Short and Dreyfus Global

-0.05

Correlation Coefficient

Jhancock Short  Dreyfus Global

Good diversification

The 3 months correlation between Jhancock and Dreyfus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Dreyfus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Real and Jhancock Short 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 Short Duration are associated (or correlated) with Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Real has no effect on the direction of Jhancock Short i.e., Jhancock Short and Dreyfus Global go up and down completely randomly.

Pair Corralation between Jhancock Short and Dreyfus Global

Assuming the 90 days horizon Jhancock Short Duration is expected to generate 0.05 times more return on investment than Dreyfus Global. However, Jhancock Short Duration is 18.68 times less risky than Dreyfus Global. It trades about -0.22 of its potential returns per unit of risk. Dreyfus Global Real is currently generating about -0.28 per unit of risk. If you would invest  937.00  in Jhancock Short Duration on October 5, 2024 and sell it today you would lose (3.00) from holding Jhancock Short Duration or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Jhancock Short Duration  vs.  Dreyfus Global Real

Jhancock Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Jhancock Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Dreyfus Global 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 Short and Dreyfus Global

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

The idea behind Jhancock Short Duration and Dreyfus Global Real 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.