Correlation Between American Funds and James Alpha
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Amcap and James Alpha Structured, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and James Alpha.
Diversification Opportunities for American Funds and James Alpha
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and James is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Amcap 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 American Funds 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 American Funds Amcap 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 American Funds i.e., American Funds and James Alpha go up and down completely randomly.
Pair Corralation between American Funds and James Alpha
Assuming the 90 days horizon American Funds Amcap is expected to generate 5.77 times more return on investment than James Alpha. However, American Funds is 5.77 times more volatile than James Alpha Structured. It trades about 0.08 of its potential returns per unit of risk. James Alpha Structured is currently generating about 0.21 per unit of risk. If you would invest 3,451 in American Funds Amcap on November 28, 2024 and sell it today you would earn a total of 867.00 from holding American Funds Amcap or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Amcap vs. James Alpha Structured
Performance |
| Timeline |
| American Funds Amcap |
| James Alpha Structured |
American Funds and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and James Alpha
The main advantage of trading using opposite American Funds and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Blackrock Diversified Fixed | American Funds vs. Principal Lifetime Hybrid | American Funds vs. Massmutual Premier Diversified | American Funds vs. American Century Diversified |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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