Correlation Between Ab Global and James Balanced

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

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

Diversification Opportunities for Ab Global and James Balanced

0.96

Correlation Coefficient

Ab Global  James Balanced

Almost no diversification

The 3 months correlation between GCEAX and James is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E 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 Ab 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 Ab Global E 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 Ab Global i.e., Ab Global and James Balanced go up and down completely randomly.

Pair Corralation between Ab Global and James Balanced

Assuming the 90 days horizon Ab Global E is expected to generate 2.25 times more return on investment than James Balanced. However, Ab Global is 2.25 times more volatile than James Balanced Golden. It trades about 0.24 of its potential returns per unit of risk. James Balanced Golden is currently generating about 0.31 per unit of risk. If you would invest  1,716  in Ab Global E on May 1, 2025 and sell it today you would earn a total of  206.00  from holding Ab Global E or generate 12.0% return on investment over 90 days.

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

Ab Global E  vs.  James Balanced Golden

Ab Global E

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global E are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

James Balanced Golden

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in James Balanced Golden are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, James Balanced may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Ab Global and James Balanced

The main advantage of trading using opposite Ab Global and James Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.

The idea behind Ab Global E and James Balanced Golden 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.