Correlation Between Visa and Jhancock Multimanager

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

By analyzing existing cross correlation between Visa Class A and Jhancock Multimanager 2065, you can compare the effects of market volatilities on Visa and Jhancock Multimanager 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 Visa with a short position of Jhancock Multimanager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jhancock Multimanager.

Diversification Opportunities for Visa and Jhancock Multimanager

0.04

Correlation Coefficient

Visa  Jhancock Multimanager

Significant diversification

The 3 months correlation between Visa and Jhancock is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Jhancock Multimanager 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multimanager and Visa 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 Visa Class A are associated (or correlated) with Jhancock Multimanager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multimanager has no effect on the direction of Visa i.e., Visa and Jhancock Multimanager go up and down completely randomly.

Pair Corralation between Visa and Jhancock Multimanager

Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.34 times more return on investment than Jhancock Multimanager. However, Visa is 1.34 times more volatile than Jhancock Multimanager 2065. It trades about 0.11 of its potential returns per unit of risk. Jhancock Multimanager 2065 is currently generating about 0.08 per unit of risk. If you would invest  21,410  in Visa Class A on December 6, 2024 and sell it today you would earn a total of  13,858  from holding Visa Class A or generate 64.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Visa Class A  vs.  Jhancock Multimanager 2065

Visa Class A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Jhancock Multimanager

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jhancock Multimanager 2065 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Jhancock Multimanager is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and Jhancock Multimanager

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

The idea behind Visa Class A and Jhancock Multimanager 2065 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.