Correlation Between James Balanced and Pro-blend(r) Moderate

Can any of the company-specific risk be diversified away by investing in both James Balanced and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate 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 Pro Blend Moderate Term, you can compare the effects of market volatilities on James Balanced and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Pro-blend(r) Moderate.

Diversification Opportunities for James Balanced and Pro-blend(r) Moderate

0.97

Correlation Coefficient

James Balanced  Pro-blend(r) Moderate

Almost no diversification

The 3 months correlation between James and Pro-blend(r) is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of James Balanced i.e., James Balanced and Pro-blend(r) Moderate go up and down completely randomly.

Pair Corralation between James Balanced and Pro-blend(r) Moderate

Assuming the 90 days horizon James Balanced Golden is expected to generate 0.96 times more return on investment than Pro-blend(r) Moderate. However, James Balanced Golden is 1.04 times less risky than Pro-blend(r) Moderate. It trades about 0.38 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.28 per unit of risk. If you would invest  2,112  in James Balanced Golden on April 20, 2025 and sell it today you would earn a total of  203.00  from holding James Balanced Golden or generate 9.61% return on investment over 90 days.

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

James Balanced Golden  vs.  Pro Blend Moderate Term

James Balanced Golden

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in James Balanced Golden are ranked lower than 29 (%) 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.

Pro-blend(r) Moderate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Blend Moderate Term are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pro-blend(r) Moderate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with James Balanced and Pro-blend(r) Moderate

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

The idea behind James Balanced Golden and Pro Blend Moderate Term 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.