Correlation Between Virtus Global and James Alpha
Can any of the company-specific risk be diversified away by investing in both Virtus Global 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 Virtus Global and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Global Real and James Alpha Global, you can compare the effects of market volatilities on Virtus Global 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 Virtus Global with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and James Alpha.
Diversification Opportunities for Virtus Global and James Alpha
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and James is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Real and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global and Virtus Global 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 Virtus Global Real 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 Global has no effect on the direction of Virtus Global i.e., Virtus Global and James Alpha go up and down completely randomly.
Pair Corralation between Virtus Global and James Alpha
Assuming the 90 days horizon Virtus Global is expected to generate 1.79 times less return on investment than James Alpha. But when comparing it to its historical volatility, Virtus Global Real is 1.01 times less risky than James Alpha. It trades about 0.06 of its potential returns per unit of risk. James Alpha Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,336 in James Alpha Global on November 4, 2024 and sell it today you would earn a total of 25.00 from holding James Alpha Global or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Global Real vs. James Alpha Global
Performance |
| Timeline |
| Virtus Global Real |
| James Alpha Global |
Virtus Global and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Global and James Alpha
The main advantage of trading using opposite Virtus Global and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Global 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.| Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Kar Mid Cap |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. Virtus Global Real | James Alpha vs. Virtus Global Real |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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