Correlation Between James Balanced and Short Duration
Can any of the company-specific risk be diversified away by investing in both James Balanced and Short Duration 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 James Balanced and Short Duration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Short Duration Inflation, you can compare the effects of market volatilities on James Balanced and Short Duration 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 James Balanced with a short position of Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Short Duration.
Diversification Opportunities for James Balanced and Short Duration
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between James and Short is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Short Duration Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Inflation and James Balanced 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 James Balanced Golden are associated (or correlated) with Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Inflation has no effect on the direction of James Balanced i.e., James Balanced and Short Duration go up and down completely randomly.
Pair Corralation between James Balanced and Short Duration
Assuming the 90 days horizon James Balanced Golden is expected to generate 3.6 times more return on investment than Short Duration. However, James Balanced is 3.6 times more volatile than Short Duration Inflation. It trades about 0.05 of its potential returns per unit of risk. Short Duration Inflation is currently generating about 0.12 per unit of risk. If you would invest 2,212 in James Balanced Golden on October 26, 2024 and sell it today you would earn a total of 69.00 from holding James Balanced Golden or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Short Duration Inflation
Performance |
| Timeline |
| James Balanced Golden |
| Short Duration Inflation |
James Balanced and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Short Duration
The main advantage of trading using opposite James Balanced and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Short Duration vs. James Balanced Golden | Short Duration vs. Global Gold Fund | Short Duration vs. Gabelli Gold Fund | Short Duration vs. Precious Metals And |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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