Correlation Between James Balanced and Optimum International
Can any of the company-specific risk be diversified away by investing in both James Balanced and Optimum International 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 Optimum International 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 Optimum International Fund, you can compare the effects of market volatilities on James Balanced and Optimum International 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 Optimum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Optimum International.
Diversification Opportunities for James Balanced and Optimum International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between James and Optimum is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Optimum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum International 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 Optimum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum International has no effect on the direction of James Balanced i.e., James Balanced and Optimum International go up and down completely randomly.
Pair Corralation between James Balanced and Optimum International
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.56 times more return on investment than Optimum International. However, James Balanced Golden is 1.79 times less risky than Optimum International. It trades about 0.36 of its potential returns per unit of risk. Optimum International Fund is currently generating about 0.03 per unit of risk. If you would invest 2,264 in James Balanced Golden on September 4, 2024 and sell it today you would earn a total of 68.00 from holding James Balanced Golden or generate 3.0% 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. Optimum International Fund
Performance |
| Timeline |
| James Balanced Golden |
| Optimum International |
James Balanced and Optimum International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Optimum International
The main advantage of trading using opposite James Balanced and Optimum International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Optimum International 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 Optimum International will offset losses from the drop in Optimum International'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 |
| Optimum International vs. Ab Small Cap | Optimum International vs. Ab Small Cap | Optimum International vs. Small Midcap Dividend Income | Optimum International vs. Chartwell Small Cap |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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