Correlation Between James Alpha and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both James Alpha and Goldman Sachs 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 Alpha and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Managed and Goldman Sachs High, you can compare the effects of market volatilities on James Alpha and Goldman Sachs 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 Alpha with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Goldman Sachs.
Diversification Opportunities for James Alpha and Goldman Sachs
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between James and Goldman is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and Goldman Sachs High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs High and James Alpha 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 Alpha Managed are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs High has no effect on the direction of James Alpha i.e., James Alpha and Goldman Sachs go up and down completely randomly.
Pair Corralation between James Alpha and Goldman Sachs
Assuming the 90 days horizon James Alpha Managed is expected to generate 3.1 times more return on investment than Goldman Sachs. However, James Alpha is 3.1 times more volatile than Goldman Sachs High. It trades about 0.16 of its potential returns per unit of risk. Goldman Sachs High is currently generating about 0.08 per unit of risk. If you would invest 1,277 in James Alpha Managed on September 13, 2024 and sell it today you would earn a total of 14.00 from holding James Alpha Managed or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
James Alpha Managed vs. Goldman Sachs High
Performance |
| Timeline |
| James Alpha Managed |
| Goldman Sachs High |
James Alpha and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Goldman Sachs
The main advantage of trading using opposite James Alpha and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| James Alpha vs. Pax High Yield | James Alpha vs. Fidelity Capital Income | James Alpha vs. Janus High Yield Fund | James Alpha vs. Msift High Yield |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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