Correlation Between James Balanced and Federated Short-term
Can any of the company-specific risk be diversified away by investing in both James Balanced and Federated Short-term 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 Federated Short-term 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 Federated Short Term Income, you can compare the effects of market volatilities on James Balanced and Federated Short-term 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 Federated Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Federated Short-term.
Diversification Opportunities for James Balanced and Federated Short-term
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between James and Federated is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Federated Short Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Term 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 Federated Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Term has no effect on the direction of James Balanced i.e., James Balanced and Federated Short-term go up and down completely randomly.
Pair Corralation between James Balanced and Federated Short-term
Assuming the 90 days horizon James Balanced Golden is expected to generate 3.0 times more return on investment than Federated Short-term. However, James Balanced is 3.0 times more volatile than Federated Short Term Income. It trades about 0.04 of its potential returns per unit of risk. Federated Short Term Income is currently generating about 0.06 per unit of risk. If you would invest 2,275 in James Balanced Golden on August 26, 2024 and sell it today you would earn a total of 24.00 from holding James Balanced Golden or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Federated Short Term Income
Performance |
| Timeline |
| James Balanced Golden |
| Federated Short Term |
James Balanced and Federated Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Federated Short-term
The main advantage of trading using opposite James Balanced and Federated Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Federated Short-term 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 Federated Short-term will offset losses from the drop in Federated Short-term'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 |
| Federated Short-term vs. Gold And Precious | Federated Short-term vs. Great West Goldman Sachs | Federated Short-term vs. Goldman Sachs Mlp | Federated Short-term vs. James Balanced Golden |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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