Correlation Between James Alpha and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both James Alpha and Ivy Natural 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 Ivy Natural 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 Ivy Natural Resources, you can compare the effects of market volatilities on James Alpha and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Ivy Natural.
Diversification Opportunities for James Alpha and Ivy Natural
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and IVY is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of James Alpha i.e., James Alpha and Ivy Natural go up and down completely randomly.
Pair Corralation between James Alpha and Ivy Natural
Assuming the 90 days horizon James Alpha is expected to generate 1.68 times less return on investment than Ivy Natural. But when comparing it to its historical volatility, James Alpha Managed is 1.53 times less risky than Ivy Natural. It trades about 0.14 of its potential returns per unit of risk. Ivy Natural Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,320 in Ivy Natural Resources on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Ivy Natural Resources or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
James Alpha Managed vs. Ivy Natural Resources
Performance |
| Timeline |
| James Alpha Managed |
| Ivy Natural Resources |
James Alpha and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Ivy Natural
The main advantage of trading using opposite James Alpha and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural's long position.| James Alpha vs. Energy Services Fund | James Alpha vs. Hennessy Bp Energy | James Alpha vs. Guinness Atkinson Alternative | James Alpha vs. Victory Global Natural |
| Ivy Natural vs. Ivy Large Cap | Ivy Natural vs. Ivy Small Cap | Ivy Natural vs. Ivy High Income | Ivy Natural vs. Ivy Apollo Multi Asset |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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