Correlation Between Navigator Equity and Jhancock Disciplined

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

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

Diversification Opportunities for Navigator Equity and Jhancock Disciplined

0.53

Correlation Coefficient

Navigator Equity  Jhancock Disciplined

Very weak diversification

The 3 months correlation between Navigator and Jhancock is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Equity Hedged and Jhancock Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Disciplined and Navigator Equity 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 Navigator Equity Hedged are associated (or correlated) with Jhancock Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Disciplined has no effect on the direction of Navigator Equity i.e., Navigator Equity and Jhancock Disciplined go up and down completely randomly.

Pair Corralation between Navigator Equity and Jhancock Disciplined

Assuming the 90 days horizon Navigator Equity Hedged is expected to generate 4.25 times more return on investment than Jhancock Disciplined. However, Navigator Equity is 4.25 times more volatile than Jhancock Disciplined Value. It trades about 0.33 of its potential returns per unit of risk. Jhancock Disciplined Value is currently generating about 0.11 per unit of risk. If you would invest  150,000  in Navigator Equity Hedged on September 14, 2024 and sell it today you would earn a total of  15,010  from holding Navigator Equity Hedged or generate 10.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	14.29%
Values	Daily Returns

Navigator Equity Hedged  vs.  Jhancock Disciplined Value

Navigator Equity Hedged

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Navigator Equity Hedged has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Navigator Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Jhancock Disciplined

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Disciplined Value are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Disciplined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Navigator Equity and Jhancock Disciplined

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

The idea behind Navigator Equity Hedged and Jhancock Disciplined Value 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.