Correlation Between James Balanced and New World
Can any of the company-specific risk be diversified away by investing in both James Balanced and New World 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 New World 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 New World Fund, you can compare the effects of market volatilities on James Balanced and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and New World.
Diversification Opportunities for James Balanced and New World
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between James and New is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of James Balanced i.e., James Balanced and New World go up and down completely randomly.
Pair Corralation between James Balanced and New World
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.6 times more return on investment than New World. However, James Balanced Golden is 1.67 times less risky than New World. It trades about 0.12 of its potential returns per unit of risk. New World Fund is currently generating about 0.02 per unit of risk. If you would invest 2,129 in James Balanced Golden on September 3, 2024 and sell it today you would earn a total of 199.00 from holding James Balanced Golden or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. New World Fund
Performance |
| Timeline |
| James Balanced Golden |
| New World Fund |
James Balanced and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and New World
The main advantage of trading using opposite James Balanced and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| James Balanced vs. Vanguard Lifestrategy Moderate | James Balanced vs. Vanguard Lifestrategy Income | James Balanced vs. Vanguard Lifestrategy Growth | James Balanced vs. Vanguard Explorer Fund |
| New World vs. Fidelity Sai Convertible | New World vs. Virtus Convertible | New World vs. Rationalpier 88 Convertible | New World vs. Gabelli Convertible 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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