Correlation Between James Balanced and International Equity
Can any of the company-specific risk be diversified away by investing in both James Balanced and International Equity 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 International Equity 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 International Equity Fund, you can compare the effects of market volatilities on James Balanced and International Equity 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 International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and International Equity.
Diversification Opportunities for James Balanced and International Equity
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between James and International is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and International Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of James Balanced i.e., James Balanced and International Equity go up and down completely randomly.
Pair Corralation between James Balanced and International Equity
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.56 times more return on investment than International Equity. However, James Balanced Golden is 1.79 times less risky than International Equity. It trades about 0.12 of its potential returns per unit of risk. International Equity Fund is currently generating about -0.25 per unit of risk. If you would invest 2,292 in James Balanced Golden on August 29, 2024 and sell it today you would earn a total of 27.00 from holding James Balanced Golden or generate 1.18% 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. International Equity Fund
Performance |
| Timeline |
| James Balanced Golden |
| International Equity |
James Balanced and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and International Equity
The main advantage of trading using opposite James Balanced and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity'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 |
| International Equity vs. James Balanced Golden | International Equity vs. Fidelity Advisor Gold | International Equity vs. Franklin Gold Precious | International Equity vs. Europac Gold Fund |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |