Correlation Between James Balanced and Northern Global
Can any of the company-specific risk be diversified away by investing in both James Balanced and Northern Global 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 Northern Global 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 Northern Global Real, you can compare the effects of market volatilities on James Balanced and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Northern Global.
Diversification Opportunities for James Balanced and Northern Global
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between James and Northern is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of James Balanced i.e., James Balanced and Northern Global go up and down completely randomly.
Pair Corralation between James Balanced and Northern Global
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.83 times more return on investment than Northern Global. However, James Balanced Golden is 1.2 times less risky than Northern Global. It trades about -0.08 of its potential returns per unit of risk. Northern Global Real is currently generating about -0.11 per unit of risk. If you would invest 2,312 in James Balanced Golden on September 12, 2024 and sell it today you would lose (25.00) from holding James Balanced Golden or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Northern Global Real
Performance |
| Timeline |
| James Balanced Golden |
| Northern Global Real |
James Balanced and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Northern Global
The main advantage of trading using opposite James Balanced and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| James Balanced vs. Vanguard Wellesley Income | James Balanced vs. Blackrock Multi Asset Income | James Balanced vs. The Hartford Balanced | James Balanced vs. The Hartford Balanced |
| Northern Global vs. Gabelli Gold Fund | Northern Global vs. James Balanced Golden | Northern Global vs. Sprott Gold Equity | Northern Global vs. International Investors Gold |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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