Correlation Between James Balanced and Fanhua

Can any of the company-specific risk be diversified away by investing in both James Balanced and Fanhua 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 Balanced and Fanhua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between James Balanced Golden and Fanhua Inc, you can compare the effects of market volatilities on James Balanced and Fanhua 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 Balanced with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Fanhua.

Diversification Opportunities for James Balanced and Fanhua

-0.15

Correlation Coefficient

James Balanced  Fanhua

Good diversification

The 3 months correlation between James and Fanhua is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and James Balanced 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 Balanced Golden are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of James Balanced i.e., James Balanced and Fanhua go up and down completely randomly.

Pair Corralation between James Balanced and Fanhua

If you would invest  2,224  in James Balanced Golden on September 4, 2024 and sell it today you would earn a total of  67.00  from holding James Balanced Golden or generate 3.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

James Balanced Golden  vs.  Fanhua Inc

James Balanced Golden

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in James Balanced Golden are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, James Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fanhua Inc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Fanhua Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady basic indicators, Fanhua demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with James Balanced and Fanhua

The main advantage of trading using opposite James Balanced and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.

The idea behind James Balanced Golden and Fanhua Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.