Correlation Between Westwood Income and James Balanced:
Can any of the company-specific risk be diversified away by investing in both Westwood Income and James Balanced: 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 Westwood Income and James Balanced: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Income Opportunity and James Balanced Golden, you can compare the effects of market volatilities on Westwood Income and James Balanced: 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 Westwood Income with a short position of James Balanced:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Income and James Balanced:.
Diversification Opportunities for Westwood Income and James Balanced:
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westwood and James is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Income Opportunity and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and Westwood Income 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 Westwood Income Opportunity are associated (or correlated) with James Balanced:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Westwood Income i.e., Westwood Income and James Balanced: go up and down completely randomly.
Pair Corralation between Westwood Income and James Balanced:
Assuming the 90 days horizon Westwood Income is expected to generate 1.38 times less return on investment than James Balanced:. But when comparing it to its historical volatility, Westwood Income Opportunity is 1.05 times less risky than James Balanced:. It trades about 0.06 of its potential returns per unit of risk. James Balanced Golden is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,875 in James Balanced Golden on October 13, 2024 and sell it today you would earn a total of 356.00 from holding James Balanced Golden or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Income Opportunity vs. James Balanced Golden
Performance |
| Timeline |
| Westwood Income Oppo |
| James Balanced Golden |
Westwood Income and James Balanced: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Income and James Balanced:
The main advantage of trading using opposite Westwood Income and James Balanced: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Income position performs unexpectedly, James Balanced: 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 Balanced: will offset losses from the drop in James Balanced:'s long position.| Westwood Income vs. Berwyn Income Fund | Westwood Income vs. Fpa Crescent Fund | Westwood Income vs. James Balanced Golden | Westwood Income vs. Westwood Largecap Value |
| James Balanced: vs. Permanent Portfolio Class | James Balanced: vs. Berwyn Income Fund | James Balanced: vs. Large Cap Fund | James Balanced: vs. Westcore Plus Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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