Correlation Between James Alpha and Gmo Global
Can any of the company-specific risk be diversified away by investing in both James Alpha and Gmo Global 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 Gmo Global 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 Gmo Global Equity, you can compare the effects of market volatilities on James Alpha and Gmo Global 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Gmo Global.
Diversification Opportunities for James Alpha and Gmo Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JAMES and Gmo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity 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 Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of James Alpha i.e., James Alpha and Gmo Global go up and down completely randomly.
Pair Corralation between James Alpha and Gmo Global
Assuming the 90 days horizon James Alpha is expected to generate 3.49 times less return on investment than Gmo Global. But when comparing it to its historical volatility, James Alpha Managed is 1.39 times less risky than Gmo Global. It trades about 0.14 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,808 in Gmo Global Equity on November 3, 2024 and sell it today you would earn a total of 128.00 from holding Gmo Global Equity or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
James Alpha Managed vs. Gmo Global Equity
Performance |
| Timeline |
| James Alpha Managed |
| Gmo Global Equity |
James Alpha and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Gmo Global
The main advantage of trading using opposite James Alpha and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| James Alpha vs. Nasdaq 100 2x Strategy | James Alpha vs. Victory Cemp Market | James Alpha vs. Franklin Emerging Market | James Alpha vs. Calvert Developed Market |
| Gmo Global vs. Small Pany Growth | Gmo Global vs. Ab Small Cap | Gmo Global vs. Praxis Small Cap | Gmo Global vs. Legg Mason Partners |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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