Correlation Between Goodhaven Fund and James Alpha
Can any of the company-specific risk be diversified away by investing in both Goodhaven Fund and James Alpha 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 Goodhaven Fund and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodhaven Fund Goodhaven and James Alpha Global, you can compare the effects of market volatilities on Goodhaven Fund and James Alpha 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 Goodhaven Fund with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodhaven Fund and James Alpha.
Diversification Opportunities for Goodhaven Fund and James Alpha
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goodhaven and James is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Goodhaven Fund Goodhaven and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global and Goodhaven Fund 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 Goodhaven Fund Goodhaven are associated (or correlated) with James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Global has no effect on the direction of Goodhaven Fund i.e., Goodhaven Fund and James Alpha go up and down completely randomly.
Pair Corralation between Goodhaven Fund and James Alpha
Assuming the 90 days horizon Goodhaven Fund Goodhaven is expected to generate 0.79 times more return on investment than James Alpha. However, Goodhaven Fund Goodhaven is 1.26 times less risky than James Alpha. It trades about 0.11 of its potential returns per unit of risk. James Alpha Global is currently generating about 0.03 per unit of risk. If you would invest 3,318 in Goodhaven Fund Goodhaven on November 28, 2024 and sell it today you would earn a total of 1,668 from holding Goodhaven Fund Goodhaven or generate 50.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodhaven Fund Goodhaven vs. James Alpha Global
Performance |
| Timeline |
| Goodhaven Fund Goodhaven |
| James Alpha Global |
Goodhaven Fund and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodhaven Fund and James Alpha
The main advantage of trading using opposite Goodhaven Fund and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodhaven Fund position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha's long position.| Goodhaven Fund vs. Wisdomtree Siegel Moderate | Goodhaven Fund vs. Jp Morgan Smartretirement | Goodhaven Fund vs. Hartford Moderate Allocation | Goodhaven Fund vs. Blackrock Moderate Prepared |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. Virtus Global Real | James Alpha vs. Virtus Global Real |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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