Correlation Between Fundamental Large and James Balanced:

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

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

Diversification Opportunities for Fundamental Large and James Balanced:

0.55

Correlation Coefficient

Fundamental Large  James Balanced:

Very weak diversification

The 3 months correlation between Fundamental and James is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Large Cap and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and Fundamental 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 Fundamental Large Cap are associated (or correlated) with James Balanced:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Fundamental Large i.e., Fundamental Large and James Balanced: go up and down completely randomly.

Pair Corralation between Fundamental Large and James Balanced:

Assuming the 90 days horizon Fundamental Large Cap is expected to under-perform the James Balanced:. In addition to that, Fundamental Large is 1.99 times more volatile than James Balanced Golden. It trades about -0.09 of its total potential returns per unit of risk. James Balanced Golden is currently generating about -0.03 per unit of volatility. If you would invest  2,236  in James Balanced Golden on December 23, 2024 and sell it today you would lose (25.00) from holding James Balanced Golden or give up 1.12% of portfolio value over 90 days.

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

Fundamental Large Cap  vs.  James Balanced Golden

Fundamental Large Cap

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with Fundamental Large and James Balanced:

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

The idea behind Fundamental Large Cap and James Balanced Golden 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.