Correlation Between Americafirst Defensive and Ab Select
Can any of the company-specific risk be diversified away by investing in both Americafirst Defensive and Ab Select 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 Defensive and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americafirst Defensive Growth and Ab Select Equity, you can compare the effects of market volatilities on Americafirst Defensive and Ab Select 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 Defensive with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Defensive and Ab Select.
Diversification Opportunities for Americafirst Defensive and Ab Select
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Americafirst and AUUIX is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Defensive Growth and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity and Americafirst Defensive 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 Defensive Growth are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Americafirst Defensive i.e., Americafirst Defensive and Ab Select go up and down completely randomly.
Pair Corralation between Americafirst Defensive and Ab Select
Assuming the 90 days horizon Americafirst Defensive Growth is expected to under-perform the Ab Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Americafirst Defensive Growth is 1.61 times less risky than Ab Select. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Ab Select Equity is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,218 in Ab Select Equity on September 2, 2024 and sell it today you would earn a total of 192.00 from holding Ab Select Equity or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Defensive Growth vs. Ab Select Equity
Performance |
| Timeline |
| Americafirst Defensive |
| Ab Select Equity |
Americafirst Defensive and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Defensive and Ab Select
The main advantage of trading using opposite Americafirst Defensive and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Defensive position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Americafirst Defensive vs. Scharf Fund Retail | Americafirst Defensive vs. Sarofim Equity | Americafirst Defensive vs. Icon Equity Income | Americafirst Defensive vs. The Gabelli Equity |
| Ab Select vs. Oppenheimer International Diversified | Ab Select vs. Tax Managed Mid Small | Ab Select vs. Davenport Small Cap | Ab Select vs. Small Cap Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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