Correlation Between Vanguard Global and James Alpha

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

By analyzing existing cross correlation between Vanguard Global Ex-us and James Alpha Global, you can compare the effects of market volatilities on Vanguard Global 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 Vanguard Global with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and James Alpha.

Diversification Opportunities for Vanguard Global and James Alpha

0.93

Correlation Coefficient

Vanguard Global  James Alpha

Almost no diversification

The 3 months correlation between Vanguard and James is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Ex-us and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global and Vanguard Global 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 Vanguard Global Ex-us 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 Global has no effect on the direction of Vanguard Global i.e., Vanguard Global and James Alpha go up and down completely randomly.

Pair Corralation between Vanguard Global and James Alpha

Assuming the 90 days horizon Vanguard Global Ex-us is expected to under-perform the James Alpha. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Global Ex-us is 1.28 times less risky than James Alpha. The mutual fund trades about -0.05 of its potential returns per unit of risk. The James Alpha Global is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,501  in James Alpha Global on December 1, 2024 and sell it today you would lose (8.00) from holding James Alpha Global or give up 0.53% of portfolio value over 90 days.

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

Vanguard Global Ex-us  vs.  James Alpha Global

Vanguard Global Ex-us

Risk-Adjusted Performance

Very Weak

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

James Alpha Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days James Alpha Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Vanguard Global and James Alpha

The main advantage of trading using opposite Vanguard Global and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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 Vanguard Global Ex-us and James Alpha Global 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..