Correlation Between Northern Institutional and James Alpha
Can any of the company-specific risk be diversified away by investing in both Northern Institutional 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 Northern Institutional and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Institutional Funds and James Alpha Global, you can compare the effects of market volatilities on Northern Institutional 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 Northern Institutional with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Institutional and James Alpha.
Diversification Opportunities for Northern Institutional and James Alpha
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northern and James is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Northern Institutional Funds 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 Northern Institutional 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 Northern Institutional Funds 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 Northern Institutional i.e., Northern Institutional and James Alpha go up and down completely randomly.
Pair Corralation between Northern Institutional and James Alpha
If you would invest 100.00 in Northern Institutional Funds on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Northern Institutional Funds or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Northern Institutional Funds vs. James Alpha Global
Performance |
| Timeline |
| Northern Institutional |
| James Alpha Global |
Northern Institutional and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Institutional and James Alpha
The main advantage of trading using opposite Northern Institutional and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Institutional 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.| Northern Institutional vs. Omni Small Cap Value | Northern Institutional vs. Qs Growth Fund | Northern Institutional vs. Nasdaq 100 Index Fund | Northern Institutional vs. Ab Value Fund |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. Virtus Global Real | James Alpha vs. Virtus Global Real |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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