Correlation Between Guidemark(r) Large and James Alpha

Can any of the company-specific risk be diversified away by investing in both Guidemark(r) Large and James Alpha 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 Guidemark(r) Large and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guidemark Large Cap and James Alpha Structured, you can compare the effects of market volatilities on Guidemark(r) Large and James Alpha 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 Guidemark(r) Large with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark(r) Large and James Alpha.

Diversification Opportunities for Guidemark(r) Large and James Alpha

-0.77

Correlation Coefficient

Guidemark(r) Large  James Alpha

Pay attention - limited upside

The 3 months correlation between GUIDEMARK(R) and James is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and James Alpha Structured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Structured and Guidemark(r) 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 Guidemark Large Cap are associated (or correlated) with James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Structured has no effect on the direction of Guidemark(r) Large i.e., Guidemark(r) Large and James Alpha go up and down completely randomly.

Pair Corralation between Guidemark(r) Large and James Alpha

Assuming the 90 days horizon Guidemark Large Cap is expected to under-perform the James Alpha. In addition to that, Guidemark(r) Large is 8.31 times more volatile than James Alpha Structured. It trades about -0.14 of its total potential returns per unit of risk. James Alpha Structured is currently generating about 0.29 per unit of volatility. If you would invest  970.00  in James Alpha Structured on December 23, 2024 and sell it today you would earn a total of  24.00  from holding James Alpha Structured or generate 2.47% return on investment over 90 days.

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

Guidemark Large Cap  vs.  James Alpha Structured

Guidemark Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guidemark Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

James Alpha Structured

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in James Alpha Structured are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, James Alpha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidemark(r) Large and James Alpha

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

The idea behind Guidemark Large Cap and James Alpha Structured 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.