Correlation Between Americafirst Defensive and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Americafirst Defensive and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Americafirst Defensive and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Defensive and Americafirst Large.
Diversification Opportunities for Americafirst Defensive and Americafirst Large
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Americafirst and Americafirst is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Defensive Growth and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Americafirst Defensive i.e., Americafirst Defensive and Americafirst Large go up and down completely randomly.
Pair Corralation between Americafirst Defensive and Americafirst Large
Assuming the 90 days horizon Americafirst Defensive Growth is expected to under-perform the Americafirst Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Americafirst Defensive Growth is 2.33 times less risky than Americafirst Large. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Americafirst Large Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Americafirst Large Cap on August 30, 2024 and sell it today you would earn a total of 103.00 from holding Americafirst Large Cap or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Americafirst Defensive Growth vs. Americafirst Large Cap
Performance |
| Timeline |
| Americafirst Defensive |
| Americafirst Large Cap |
Americafirst Defensive and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Defensive and Americafirst Large
The main advantage of trading using opposite Americafirst Defensive and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Defensive position performs unexpectedly, Americafirst Large 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 Large will offset losses from the drop in Americafirst Large's long position.| Americafirst Defensive vs. Arrow Managed Futures | Americafirst Defensive vs. Aqr Managed Futures | Americafirst Defensive vs. American Funds Inflation | Americafirst Defensive vs. Oklahoma College Savings |
| Americafirst Large vs. Qs Large Cap | Americafirst Large vs. Dana Large Cap | Americafirst Large vs. Cb Large Cap | Americafirst Large vs. Tax Managed Large Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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