Correlation Between Income Fund and Americafirst Income
Can any of the company-specific risk be diversified away by investing in both Income Fund and Americafirst Income 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 Income Fund and Americafirst Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and Americafirst Income Fund, you can compare the effects of market volatilities on Income Fund and Americafirst Income 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 Income Fund with a short position of Americafirst Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Americafirst Income.
Diversification Opportunities for Income Fund and Americafirst Income
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Income and Americafirst is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and Americafirst Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Income and Income Fund 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 Income Fund Of are associated (or correlated) with Americafirst Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Income has no effect on the direction of Income Fund i.e., Income Fund and Americafirst Income go up and down completely randomly.
Pair Corralation between Income Fund and Americafirst Income
Assuming the 90 days horizon Income Fund Of is expected to generate 0.63 times more return on investment than Americafirst Income. However, Income Fund Of is 1.59 times less risky than Americafirst Income. It trades about 0.25 of its potential returns per unit of risk. Americafirst Income Fund is currently generating about -0.18 per unit of risk. If you would invest 2,514 in Income Fund Of on November 28, 2024 and sell it today you would earn a total of 51.00 from holding Income Fund Of or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. Americafirst Income Fund
Performance |
| Timeline |
| Income Fund |
| Americafirst Income |
Income Fund and Americafirst Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and Americafirst Income
The main advantage of trading using opposite Income Fund and Americafirst Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, Americafirst Income 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 Americafirst Income will offset losses from the drop in Americafirst Income's long position.| Income Fund vs. Legg Mason Partners | Income Fund vs. Us Government Securities | Income Fund vs. Federated Government Income | Income Fund vs. Inverse Government Long |
| Americafirst Income vs. Profunds Large Cap Growth | Americafirst Income vs. Lord Abbett Affiliated | Americafirst Income vs. Old Westbury Large | Americafirst Income vs. Tiaa Cref Large Cap 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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