Correlation Between Jhancock Real and Old Westbury

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

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

Diversification Opportunities for Jhancock Real and Old Westbury

0.73

Correlation Coefficient

Jhancock Real  Old Westbury

Poor diversification

The 3 months correlation between Jhancock and Old is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and Old Westbury Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Credit and Jhancock Real 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 Real Estate are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Credit has no effect on the direction of Jhancock Real i.e., Jhancock Real and Old Westbury go up and down completely randomly.

Pair Corralation between Jhancock Real and Old Westbury

Assuming the 90 days horizon Jhancock Real Estate is expected to under-perform the Old Westbury. In addition to that, Jhancock Real is 2.95 times more volatile than Old Westbury Credit. It trades about -0.1 of its total potential returns per unit of risk. Old Westbury Credit is currently generating about 0.03 per unit of volatility. If you would invest  803.00  in Old Westbury Credit on November 29, 2024 and sell it today you would earn a total of  5.00  from holding Old Westbury Credit or generate 0.62% return on investment over 90 days.

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

Jhancock Real Estate  vs.  Old Westbury Credit

Jhancock Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jhancock Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Old Westbury Credit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Credit are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Old Westbury 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 Real and Old Westbury

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

The idea behind Jhancock Real Estate and Old Westbury Credit 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.