Correlation Between James Balanced and Pace High
Can any of the company-specific risk be diversified away by investing in both James Balanced and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on James Balanced and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Pace High.
Diversification Opportunities for James Balanced and Pace High
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Pace is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of James Balanced i.e., James Balanced and Pace High go up and down completely randomly.
Pair Corralation between James Balanced and Pace High
Assuming the 90 days horizon James Balanced Golden is expected to generate 1.82 times more return on investment than Pace High. However, James Balanced is 1.82 times more volatile than Pace High Yield. It trades about 0.1 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.15 per unit of risk. If you would invest 1,875 in James Balanced Golden on September 3, 2024 and sell it today you would earn a total of 453.00 from holding James Balanced Golden or generate 24.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Pace High Yield
Performance |
| Timeline |
| James Balanced Golden |
| Pace High Yield |
James Balanced and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Pace High
The main advantage of trading using opposite James Balanced and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High'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 |
| Pace High vs. Global Gold Fund | Pace High vs. Fidelity Advisor Gold | Pace High vs. James Balanced Golden | Pace High 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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