Correlation Between James Balanced and Vanguard Lifestrategy
Can any of the company-specific risk be diversified away by investing in both James Balanced and Vanguard Lifestrategy 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 Vanguard Lifestrategy 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 Vanguard Lifestrategy Moderate, you can compare the effects of market volatilities on James Balanced and Vanguard Lifestrategy 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 Vanguard Lifestrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Vanguard Lifestrategy.
Diversification Opportunities for James Balanced and Vanguard Lifestrategy
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between James and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Vanguard Lifestrategy Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Lifestrategy 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 Vanguard Lifestrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Lifestrategy has no effect on the direction of James Balanced i.e., James Balanced and Vanguard Lifestrategy go up and down completely randomly.
Pair Corralation between James Balanced and Vanguard Lifestrategy
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.92 times more return on investment than Vanguard Lifestrategy. However, James Balanced Golden is 1.09 times less risky than Vanguard Lifestrategy. It trades about 0.15 of its potential returns per unit of risk. Vanguard Lifestrategy Moderate is currently generating about 0.12 per unit of risk. If you would invest 1,974 in James Balanced Golden on September 4, 2024 and sell it today you would earn a total of 358.00 from holding James Balanced Golden or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Vanguard Lifestrategy Moderate
Performance |
| Timeline |
| James Balanced Golden |
| Vanguard Lifestrategy |
James Balanced and Vanguard Lifestrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Vanguard Lifestrategy
The main advantage of trading using opposite James Balanced and Vanguard Lifestrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Vanguard Lifestrategy 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 Vanguard Lifestrategy will offset losses from the drop in Vanguard Lifestrategy'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 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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