Correlation Between International Investors and James Balanced
Can any of the company-specific risk be diversified away by investing in both International Investors and James Balanced 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 International Investors and James Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and James Balanced Golden, you can compare the effects of market volatilities on International Investors and James Balanced 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 International Investors with a short position of James Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and James Balanced.
Diversification Opportunities for International Investors and James Balanced
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and James is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and International Investors 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 International Investors Gold are associated (or correlated) with James Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of International Investors i.e., International Investors and James Balanced go up and down completely randomly.
Pair Corralation between International Investors and James Balanced
Assuming the 90 days horizon International Investors Gold is expected to generate 3.91 times more return on investment than James Balanced. However, International Investors is 3.91 times more volatile than James Balanced Golden. It trades about 0.04 of its potential returns per unit of risk. James Balanced Golden is currently generating about 0.1 per unit of risk. If you would invest 732.00 in International Investors Gold on September 3, 2024 and sell it today you would earn a total of 245.00 from holding International Investors Gold or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. James Balanced Golden
Performance |
| Timeline |
| International Investors |
| James Balanced Golden |
International Investors and James Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and James Balanced
The main advantage of trading using opposite International Investors and James Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, James Balanced 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 Balanced will offset losses from the drop in James Balanced's long position.| International Investors vs. First Eagle Gold | International Investors vs. First Eagle Gold | International Investors vs. First Eagle Gold | International Investors vs. Oppenheimer Gold Spec |
| James Balanced vs. Vanguard Lifestrategy Moderate | James Balanced vs. Vanguard Lifestrategy Income | James Balanced vs. Vanguard Lifestrategy Growth | James Balanced vs. Vanguard Explorer Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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