Correlation Between Jhancock Real and Transamerica

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

Diversification Opportunities for Jhancock Real and Transamerica

0.38

Correlation Coefficient

Jhancock Real  Transamerica

Weak diversification

The 3 months correlation between Jhancock and Transamerica is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Real Estate and Transamerica Growth T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Growth 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 Transamerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Growth has no effect on the direction of Jhancock Real i.e., Jhancock Real and Transamerica go up and down completely randomly.

Pair Corralation between Jhancock Real and Transamerica

Assuming the 90 days horizon Jhancock Real is expected to generate 2.14 times less return on investment than Transamerica. But when comparing it to its historical volatility, Jhancock Real Estate is 1.22 times less risky than Transamerica. It trades about 0.02 of its potential returns per unit of risk. Transamerica Growth T is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11,226  in Transamerica Growth T on December 5, 2024 and sell it today you would earn a total of  564.00  from holding Transamerica Growth T or generate 5.02% return on investment over 90 days.

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

Jhancock Real Estate  vs.  Transamerica Growth T

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 fairly strong fundamental drivers, Jhancock Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transamerica Growth T 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 Jhancock Real and Transamerica

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

The idea behind Jhancock Real Estate and Transamerica Growth T 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.