Correlation Between Americafirst Monthly and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Americafirst Monthly and Hartford Small 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 Americafirst Monthly and Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Monthly Risk On and Hartford Small Cap, you can compare the effects of market volatilities on Americafirst Monthly and Hartford Small 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 Americafirst Monthly with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Monthly and Hartford Small.
Diversification Opportunities for Americafirst Monthly and Hartford Small
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americafirst and Hartford is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Monthly Risk On and Hartford Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small Cap and Americafirst Monthly 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 Americafirst Monthly Risk On are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small Cap has no effect on the direction of Americafirst Monthly i.e., Americafirst Monthly and Hartford Small go up and down completely randomly.
Pair Corralation between Americafirst Monthly and Hartford Small
Assuming the 90 days horizon Americafirst Monthly Risk On is expected to generate 1.64 times more return on investment than Hartford Small. However, Americafirst Monthly is 1.64 times more volatile than Hartford Small Cap. It trades about 0.08 of its potential returns per unit of risk. Hartford Small Cap is currently generating about -0.41 per unit of risk. If you would invest 1,503 in Americafirst Monthly Risk On on October 9, 2024 and sell it today you would earn a total of 46.00 from holding Americafirst Monthly Risk On or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Monthly Risk On vs. Hartford Small Cap
Performance |
| Timeline |
| Americafirst Monthly |
| Hartford Small Cap |
Americafirst Monthly and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Monthly and Hartford Small
The main advantage of trading using opposite Americafirst Monthly and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Monthly position performs unexpectedly, Hartford Small 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 Hartford Small will offset losses from the drop in Hartford Small's long position.| Americafirst Monthly vs. Americafirst Large Cap | Americafirst Monthly vs. Americafirst Large Cap | Americafirst Monthly vs. Americafirst Large Cap | Americafirst Monthly vs. Americafirst Tactical Alpha |
| Hartford Small vs. The Hartford Growth | Hartford Small vs. The Hartford Growth | Hartford Small vs. The Hartford Growth | Hartford Small vs. The Hartford Growth |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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