Correlation Between Visa and Jhancock Global

Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Jhancock Global 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 Global Equity, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Jhancock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jhancock Global.

Diversification Opportunities for Visa and Jhancock Global

-0.4

Correlation Coefficient

Visa  Jhancock Global

Very good diversification

The 3 months correlation between Visa and Jhancock is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 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 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 Visa i.e., Visa and Jhancock Global go up and down completely randomly.

Pair Corralation between Visa and Jhancock Global

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.51 times more return on investment than Jhancock Global. However, Visa Class A is 1.94 times less risky than Jhancock Global. It trades about 0.09 of its potential returns per unit of risk. Jhancock Global Equity is currently generating about -0.17 per unit of risk. If you would invest  30,990  in Visa Class A on October 22, 2024 and sell it today you would earn a total of  972.00  from holding Visa Class A or generate 3.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Visa Class A  vs.  Jhancock Global Equity

Visa Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jhancock Global Equity

Risk-Adjusted Performance

0 of 100

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 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 Visa and Jhancock Global

The main advantage of trading using opposite Visa and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.