Correlation Between James Alpha and James Alpha
Can any of the company-specific risk be diversified away by investing in both James Alpha 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 James Alpha and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Structured and James Alpha Managed, you can compare the effects of market volatilities on James Alpha 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 James Alpha with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and James Alpha.
Diversification Opportunities for James Alpha and James Alpha
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and James is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Structured 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 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 Structured 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 James Alpha i.e., James Alpha and James Alpha go up and down completely randomly.
Pair Corralation between James Alpha and James Alpha
Assuming the 90 days horizon James Alpha is expected to generate 27.17 times less return on investment than James Alpha. But when comparing it to its historical volatility, James Alpha Structured is 4.23 times less risky than James Alpha. It trades about 0.02 of its potential returns per unit of risk. James Alpha Managed is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,289 in James Alpha Managed on August 30, 2024 and sell it today you would earn a total of 36.00 from holding James Alpha Managed or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
James Alpha Structured vs. James Alpha Managed
Performance |
| Timeline |
| James Alpha Structured |
| James Alpha Managed |
James Alpha and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and James Alpha
The main advantage of trading using opposite James Alpha and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha 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.| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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