Correlation Between James Balanced: and Smead Funds

Can any of the company-specific risk be diversified away by investing in both James Balanced: and Smead Funds 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 James Balanced: and Smead Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between James Balanced Golden and Smead Funds Trust, you can compare the effects of market volatilities on James Balanced: and Smead Funds 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 James Balanced: with a short position of Smead Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced: and Smead Funds.

Diversification Opportunities for James Balanced: and Smead Funds

-0.01

Correlation Coefficient

James Balanced:  Smead Funds

Good diversification

The 3 months correlation between James and Smead is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Smead Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Funds Trust and James Balanced: 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 James Balanced Golden are associated (or correlated) with Smead Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Funds Trust has no effect on the direction of James Balanced: i.e., James Balanced: and Smead Funds go up and down completely randomly.

Pair Corralation between James Balanced: and Smead Funds

Assuming the 90 days horizon James Balanced Golden is expected to under-perform the Smead Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, James Balanced Golden is 1.97 times less risky than Smead Funds. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Smead Funds Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  5,360  in Smead Funds Trust on December 28, 2024 and sell it today you would earn a total of  490.00  from holding Smead Funds Trust or generate 9.14% return on investment over 90 days.

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

James Balanced Golden  vs.  Smead Funds Trust

James Balanced Golden

Risk-Adjusted Performance

Very Weak

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

Smead Funds Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smead Funds Trust are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Smead Funds may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with James Balanced: and Smead Funds

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

The idea behind James Balanced Golden and Smead Funds Trust 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.