Correlation Between Qs Large and Jhancock Global

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

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

Diversification Opportunities for Qs Large and Jhancock Global

0.69

Correlation Coefficient

Qs Large  Jhancock Global

Poor diversification

The 3 months correlation between LMUSX and Jhancock is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Qs Large Cap and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity and Qs Large 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 Qs Large Cap are associated (or correlated) with Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Qs Large i.e., Qs Large and Jhancock Global go up and down completely randomly.

Pair Corralation between Qs Large and Jhancock Global

Assuming the 90 days horizon Qs Large Cap is expected to under-perform the Jhancock Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Qs Large Cap is 1.33 times less risky than Jhancock Global. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Jhancock Global Equity is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,360  in Jhancock Global Equity on December 11, 2024 and sell it today you would lose (172.00) from holding Jhancock Global Equity or give up 12.65% of portfolio value over 90 days.

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

Qs Large Cap  vs.  Jhancock Global Equity

Qs Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qs Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Jhancock Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jhancock Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Qs Large and Jhancock Global

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

The idea behind Qs Large Cap and Jhancock Global Equity 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.