Correlation Between James Balanced: and Cref Inflation-linked
Can any of the company-specific risk be diversified away by investing in both James Balanced: and Cref Inflation-linked 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 Cref Inflation-linked 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on James Balanced: and Cref Inflation-linked 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 Cref Inflation-linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced: and Cref Inflation-linked.
Diversification Opportunities for James Balanced: and Cref Inflation-linked
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JAMES and Cref is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation-linked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of James Balanced: i.e., James Balanced: and Cref Inflation-linked go up and down completely randomly.
Pair Corralation between James Balanced: and Cref Inflation-linked
Assuming the 90 days horizon James Balanced Golden is expected to generate 2.83 times more return on investment than Cref Inflation-linked. However, James Balanced: is 2.83 times more volatile than Cref Inflation Linked Bond. It trades about 0.26 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.25 per unit of risk. If you would invest 2,223 in James Balanced Golden on November 3, 2024 and sell it today you would earn a total of 58.00 from holding James Balanced Golden or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
James Balanced Golden vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| James Balanced Golden |
| Cref Inflation Linked |
James Balanced: and Cref Inflation-linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced: and Cref Inflation-linked
The main advantage of trading using opposite James Balanced: and Cref Inflation-linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced: position performs unexpectedly, Cref Inflation-linked 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 Cref Inflation-linked will offset losses from the drop in Cref Inflation-linked'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 |
| Cref Inflation-linked vs. Aqr Sustainable Long Short | Cref Inflation-linked vs. Artisan Developing World | Cref Inflation-linked vs. Balanced Strategy Fund | Cref Inflation-linked vs. Mid Cap 15x Strategy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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