Correlation Between Six Circles and James Alpha
Can any of the company-specific risk be diversified away by investing in both Six Circles 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 Six Circles and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Circles Managed and James Alpha Structured, you can compare the effects of market volatilities on Six Circles 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 Six Circles with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Circles and James Alpha.
Diversification Opportunities for Six Circles and James Alpha
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Six and James is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Six Circles Managed 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 Six Circles 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 Six Circles Managed 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 Six Circles i.e., Six Circles and James Alpha go up and down completely randomly.
Pair Corralation between Six Circles and James Alpha
Assuming the 90 days horizon Six Circles Managed is expected to generate 6.81 times more return on investment than James Alpha. However, Six Circles is 6.81 times more volatile than James Alpha Structured. It trades about 0.13 of its potential returns per unit of risk. James Alpha Structured is currently generating about 0.04 per unit of risk. If you would invest 2,049 in Six Circles Managed on August 30, 2024 and sell it today you would earn a total of 82.00 from holding Six Circles Managed or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Circles Managed vs. James Alpha Structured
Performance |
| Timeline |
| Six Circles Managed |
| James Alpha Structured |
Six Circles and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Circles and James Alpha
The main advantage of trading using opposite Six Circles and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Circles 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.| Six Circles vs. Ancorathelen Small Mid Cap | Six Circles vs. Qs Small Capitalization | Six Circles vs. Ab Small Cap | Six Circles vs. Chase Growth Fund |
| James Alpha vs. Volumetric Fund Volumetric | James Alpha vs. Qs Large Cap | James Alpha vs. Aam Select Income | James Alpha vs. Western Asset Municipal |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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