Correlation Between Gateway Fund and James Alpha
Can any of the company-specific risk be diversified away by investing in both Gateway 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 Gateway 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 Gateway Fund Class and James Alpha Managed, you can compare the effects of market volatilities on Gateway 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 Gateway Fund with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Fund and James Alpha.
Diversification Opportunities for Gateway Fund and James Alpha
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Gateway and James is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Fund Class and James Alpha Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Managed and Gateway 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 Gateway Fund Class 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 Managed has no effect on the direction of Gateway Fund i.e., Gateway Fund and James Alpha go up and down completely randomly.
Pair Corralation between Gateway Fund and James Alpha
Assuming the 90 days horizon Gateway Fund Class is expected to under-perform the James Alpha. In addition to that, Gateway Fund is 1.13 times more volatile than James Alpha Managed. It trades about -0.09 of its total potential returns per unit of risk. James Alpha Managed is currently generating about -0.08 per unit of volatility. If you would invest 1,287 in James Alpha Managed on October 9, 2024 and sell it today you would lose (12.00) from holding James Alpha Managed or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gateway Fund Class vs. James Alpha Managed
Performance |
| Timeline |
| Gateway Fund Class |
| James Alpha Managed |
Gateway Fund and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Fund and James Alpha
The main advantage of trading using opposite Gateway Fund and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway 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.| Gateway Fund vs. Fulcrum Diversified Absolute | Gateway Fund vs. Thrivent Diversified Income | Gateway Fund vs. Madison Diversified Income | Gateway Fund vs. Federated Hermes Conservative |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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