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 Managed and James Alpha Structured, 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

0.74

Correlation Coefficient

James Alpha  James Alpha

Poor diversification

The 3 months correlation between James and James is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and James Alpha Structured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Structured 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 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 Structured 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 Managed is expected to generate 3.94 times more return on investment than James Alpha. However, James Alpha is 3.94 times more volatile than James Alpha Structured. It trades about 0.19 of its potential returns per unit of risk. James Alpha Structured is currently generating about 0.1 per unit of risk. If you would invest  1,295  in James Alpha Managed on September 13, 2024 and sell it today you would earn a total of  67.00  from holding James Alpha Managed or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

James Alpha Managed  vs.  James Alpha Structured

James Alpha Managed

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in James Alpha Managed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, James Alpha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

James Alpha Structured

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in James Alpha Structured are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, James Alpha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

The idea behind James Alpha Managed and James Alpha Structured 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.