Correlation Between James Balanced and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both James Balanced and Vanguard Total 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 Total 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 Total Bond, you can compare the effects of market volatilities on James Balanced and Vanguard Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Vanguard Total.
Diversification Opportunities for James Balanced and Vanguard Total
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between James and Vanguard is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Bond 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of James Balanced i.e., James Balanced and Vanguard Total go up and down completely randomly.
Pair Corralation between James Balanced and Vanguard Total
Assuming the 90 days horizon James Balanced Golden is expected to generate 1.26 times more return on investment than Vanguard Total. However, James Balanced is 1.26 times more volatile than Vanguard Total Bond. It trades about 0.13 of its potential returns per unit of risk. Vanguard Total Bond is currently generating about 0.05 per unit of risk. If you would invest 1,987 in James Balanced Golden on August 27, 2024 and sell it today you would earn a total of 312.00 from holding James Balanced Golden or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Vanguard Total Bond
Performance |
| Timeline |
| James Balanced Golden |
| Vanguard Total Bond |
James Balanced and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Vanguard Total
The main advantage of trading using opposite James Balanced and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total'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 |
| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard 500 Index |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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