Correlation Between James Balanced and Great West
Can any of the company-specific risk be diversified away by investing in both James Balanced and Great West 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 Great West 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 Great West Lifetime 2050, you can compare the effects of market volatilities on James Balanced and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Great West.
Diversification Opportunities for James Balanced and Great West
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between James and Great is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Great West Lifetime 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of James Balanced i.e., James Balanced and Great West go up and down completely randomly.
Pair Corralation between James Balanced and Great West
Assuming the 90 days horizon James Balanced is expected to generate 1.25 times less return on investment than Great West. But when comparing it to its historical volatility, James Balanced Golden is 2.37 times less risky than Great West. It trades about 0.12 of its potential returns per unit of risk. Great West Lifetime 2050 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,162 in Great West Lifetime 2050 on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Great West Lifetime 2050 or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Great West Lifetime 2050
Performance |
| Timeline |
| James Balanced Golden |
| Great West Lifetime |
James Balanced and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Great West
The main advantage of trading using opposite James Balanced and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Goldman Sachs Short Term | Great West vs. Vy T Rowe | Great West vs. Federated Hermes Conservative | Great West vs. T Rowe Price |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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